seanyg

Just heard the good news on BBC NEWS 24 a few minutes ago. Now I know very little about economics but I assume this means the world can breathe a sigh of relief?

How long till the UK housing market picks up, I wonder... hopefully within the next year I'm sure we're not the only people whose emigration plans will be disrupted if the economic crisis deepens...

nikki dreaming

I don't know much about economics either, not sure its a sigh of relief, but hopefully may bring back a tad of stability

We have a buyer for the house who went to apply for a mortgage on Mon morning, and the product just got pulled and there hasn't been anything to replace it yet, so I am hoping that this news may allow the banks etc to review their position re mortgages and we can start to move forward a bit

MikeUK

I think they may start lending again but the 10 -20 % deposits and three times earnings will stay probably for several years
You won't see high multiple mortgages or zero downs for a very long time

dbd33

I don't think this introduction of liquidity into a specific inter-bank lending market will do anything very much to encourage banks to advance mortgages to individual homebuyers in the US and nothing at all to encourage banks outside the US to advance mortgages. I think UK banks will move towards lending out only money that they have taken in and that this means a mortgage crunch and declining housing market for a long while to come.

seanyg

But it's got to help - surely? All I heard (prior to the bailout's approval) was how it would rock the world economy and affect most countries if it didn't happen, so I just assumed (more fool me?) that as it's gone ahead there should be some light at the end of the tunnel...

Oh dear.

nikki dreaming

Our buyer has a 30% deposit fortunately, agree with your view above though, its almost impossible for first time buyers

seanyg

I'm surprised there aren't more people downsizing - e.g. people whose fixed rates have ended and they can't afford the variable, so have to sell their (for example) 4 bed detached and downsize to a 3 bed semi (like ours!) - they wouldn't have a problem with a mortgage if they have a decent deposit on the house they're selling.. why aren't there more people like this? It's sh!t having to rely on 1st or 2nd-time buyers to get your house sold!!

MB-Realtor

The Banks that have suffered have been the ones that borrowed money to re-lend, rather than those Banks that only loaned money they received on deposit, which was always the "normal" way of doing business.


Banks are still receiving deposits, which cost them money, so they will have to Lend it out again to keep in business, so mortgage lending will resume in the UK and USA but perhaps following the Canadian model, of min of 5% down, roughly 3 times earnings, and a fair credit rating, rather than their old motto of "if it breaths lend it money".

Novocastrian

But this only reinforces dbd33's contention that an injection of liquidity misses the point. It's a lack of adequate capitalization which is the real problem.

Tangram

http://www.apple.com/trailers/independent/iousa/

MarkG

They can't buy your house because they can't sell their house; any potential buyers would have to be either brave or mad to buy a 400,000 pound house (a guess based on what a four-bed house would have sold for around where I lived) when prices are dropping 1% or more every month. People love to 'earn' 4,000 pounds a month for doing nothing when prices are increasing at that rate, but they hate losing that amount of money... particularly month after month after month for years.

johnh009

A spokesman for Nationwide actually admitted last week, that, due to lack of data, they now do not know how far house prices will fall in the UK. At the worst, some reports say they will drop as much as 60% and prices will not start to recover until 2013. Who knows?

seanyg

Yeah I guess you're right. Wow you must come from an expensive area - 4 bed detacheds round here are less than £200k! (our 3 bed semi (lovely area, nice schools, blah blah...) is on for £154k if anyone's interested, hehe ).

So I'm guessing the reason Canada has been relatively untouched by the credit crunch is due to their more sensible approach to lending...makes sense.