Lowest number of Mortgage Approvals since records began.
In a breaking report from the Bank of England only 64,000 mortgages were approved last month.
Thr full impact of the credit crunch has now spilled over into the mainstream. Trumpo is fully aware of the lack of available funds in the mortgage market, but I personally feel that we should now be at the mortgage transactions low point.
Most mortgage approvals last month would have been re-mortgages and we can’t see these figures dropping as re-mortgage demand continues.
The £50 Billion pumped in by the Bank of England should allow some of the mortgage lending banks to sell on some of their mortgage book and release some new cpaital to start lending again. The new lending however will only be granted to A1 payment profile customers with clean credit histories.
The governor of the Bank of England has just had to answer some tough questions from the Govt Select Committe about our financial system within the last few minutes. He has replied to some if these questions by stating the hot-shots in The City of London are paid far too much and take too many risks. He states the large Banks and Financial Insitutions are not impressive and the smaller firms, with lower paid staff are more so.
The general opinion of the Governor of the Bank of England is quite damning of the City and those that operate within it. He goes onto say that their will be no financial crisis in the future if the Banking reform he has proposed is passed as law.
The Governor also asks for housing costs to be included in the CPI so a true inflation figure is observed. He has been proposing this for some time - another swipe at the chancellor?
Your comments on this hot topic please!
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April 29th, 2008 at 10:23 am
I think we have not reached bottom yet, I see them steadily declining until next spring.
I kept telling anyone who would listen this was comming (hence selling my B2Ls in 2005 - a little early perhaps), but everyone else in the industry kept telling me I was neg head, that the party would never end.
I’m seeing a lot of brokers leave the business, the job is just too hard and unfiling now.
April 29th, 2008 at 10:52 am
Well it’s no surpise………………banks are to blame they have not lent responsibly for the sake of chasing profits. Such a shame its never them that end up the loser.
It’s going to take the best part of 3 years to sort this mess out.
I’d say 20% of my existing clients in the last month are selling their homes and moving into rented!
Then we have the FSA…….more civil servants just look and see whats happened to the Child support agency, it’s has to be self regulation the financial services industry is so diverse it needs self regulation, i’ll stick with Mervin King on this one he knows best
April 29th, 2008 at 3:26 pm
The press seem to be overlooking the sub-prime car finance market which is also in turmoil at the moment. Welcome Finance have last week pulled out of the market after being declined further funding in the city. Some 200 + redundancies are expected and many brokers affected. British Credit Trust recently raised base rates and cut many of it’s brokers. The Funding Corporation and Blue Motor Finance both stopped lending.More to follow…?
April 29th, 2008 at 3:52 pm
fantastic…the ability to write down £bns and then ask your shareholders for more cash as your capital reserves are a little weak.
I dont think pointing the finger really pays any dividends, apart from a little minute of ” i told you so”, but the responsibilty has to be accepted by the large institutions who knowingly took us down the path we are on and due to their size, can refinance and move on. What is left for the many small businesses who cannot take advantage of the same rescue plan. Some effort needs to be put into making sure that this fine profession of qualified individuals, offering quality advice, has similar protection.
Why should we be put to the sword over this corporate greed?
April 29th, 2008 at 5:40 pm
Agree with all comments above. As is often the case, those who will end up paying for the banks greed will be the least able to afford it. The banks refinance devalues everyone else’s assets.
I also have been (finally proven right that the housing boom had to come to an end and far to many people were trying to take massive risks, with the complicity of the lenders and the tacit agreement of the FSA who for a change were working on caveat emptor, not recognising that the risk of over lending spills over in to the rest of the economy when the rounds of pass the parcel come to an end!
Even a child should have seen that “off balance sheet” was a recipy for disaster in the end if it was simply a packaged parcel which a middle man then certified and passed back in tranches to similar institutions!
April 29th, 2008 at 8:40 pm
Who would buy a property now when they can wait another 1 or 2 years and buy the same house for 30% less?
I agree with Trumpo that mortgage approvals may have bottomed. The banks panicked in February and March. Nerves have now calmed a little and banks are becoming accustomed to the new state of play. Banks will begin to offer more mortgages but only to A1 borrowers as Trumps says.
But I come back to my main point, you’d be crazy to buy a house this year or probably next. So I don’t expect mortgage approvals to rise by any meaningful amount for quite some time.
May 1st, 2008 at 3:00 pm
Lets face it there is no single reason why we are in this mess and no single solution to get us out of it and the fact that lenders are reflecting the market place (LIBOR) margins should surprise none of us. Therefore everyone who is trying to help, and that means the BoE and (regrettably) the current chancellor/PM, have a task to rebuild confidence. We in the mortgage market have our own small part to play and I hope trumpo is right when he thinks we have reached the bottom - the last time this happened Bear Stearns were one of the last to leave the market, lets hope that Rooftop’s recent announcement is a bit of deja` vue . PS 1st at Brands !!
May 1st, 2008 at 3:21 pm
Grotgame…
You are on the money as always..
Another 3 lenders this week have packed up and gone home.. it should actually make an advisers job a lot simpler and hopefully enable them to re-establish some sort of focus and normality.
p.s.
I expect my cheque in the post following my recent advice to you on how to drive a race car quickly.. it obviously served you well.
Congratulations on a well deserved P1 at Brands Hatch - I feel like a proud father.
Your little Trumpo.
May 8th, 2008 at 12:17 pm
Cheers Dad
next out at Anglesey 8th June