The banks will lend to a worthy borrower. However house prices are way over-valued and need to fall. The banks have (finally) realised this therefore hedge against the inevitable by refusing 100% loans. Without these, first-time buyers are effectively frozen out of the home-buying market with the result that there is little activity on the mortgage front.
But dont blame the banks for behaving responsibly now, rather blame them for their irresponsible lending in the past which helped take house prices to the unsustainable level we see today.
It may not be a bad thing in the long run. If people fund their consumption from their actual earnings and saving up then eventually we won't be depending on parasitic banksters to enjoy life.
The short term is tough but the long term prospects are better.
It's instructive to look at the BoE data in Tables A5.3 and A5.4 of Bankstats. Look at the non-seasonally adjusted numbers for amounts outstanding in 5.3: these show the real money flows from banks to housing. The look at the size of the average mortgage being approved for house purchase by dividing the sums approved by the number of approvals: there may not be so many of them, but they seem to be nearly back to peak levels (and a very high percentage of the average house price). That's what is preventing prices from falling.
It depends where you live. London and the SE house prices seem pretty dislocated from the rest of the country.
In truth the valuation in comparison with gold favours gold at the moment (if that means anything)
Inflation is running at 10% plus on essentials. The matches I bought for our BBQ snapped at a rate of 20% and the sausages were full of gristle. The official measures of inflation would not have shown this degradation in quality.
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The banks will lend to a worthy borrower. However house prices are way over-valued and need to fall. The banks have (finally) realised this therefore hedge against the inevitable by refusing 100% loans. Without these, first-time buyers are effectively frozen out of the home-buying market with the result that there is little activity on the mortgage front.
But dont blame the banks for behaving responsibly now, rather blame them for their irresponsible lending in the past which helped take house prices to the unsustainable level we see today.
There is credit. There is a wall of cash out there from either savings, pensions, QE.
It's just that its chasing other bubbles.
It may not be a bad thing in the long run. If people fund their consumption from their actual earnings and saving up then eventually we won't be depending on parasitic banksters to enjoy life.
The short term is tough but the long term prospects are better.
It's instructive to look at the BoE data in Tables A5.3 and A5.4 of Bankstats. Look at the non-seasonally adjusted numbers for amounts outstanding in 5.3: these show the real money flows from banks to housing. The look at the size of the average mortgage being approved for house purchase by dividing the sums approved by the number of approvals: there may not be so many of them, but they seem to be nearly back to peak levels (and a very high percentage of the average house price). That's what is preventing prices from falling.
It depends where you live. London and the SE house prices seem pretty dislocated from the rest of the country.
In truth the valuation in comparison with gold favours gold at the moment (if that means anything)
Inflation is running at 10% plus on essentials. The matches I bought for our BBQ snapped at a rate of 20% and the sausages were full of gristle. The official measures of inflation would not have shown this degradation in quality.
Hope you're enjoying the nice weather, y'all.
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