House prices set for ‘slow motion’ crash
Mortgage Solutions | 11 Oct 2011 | 08:29
IFAonline
Whilst the contraction of mortgage finance has had and will continue to have an effect on prices, I believe the following factors will pull prices the other way in the UK.
Loss of faith in the equity markets is pushing more and more people to buy physical assets rather than ‘paper based’ ones they do not trust. I have noticed an ever increasing shift into this kind of thinking over the last few months.
Regardless of the much hyped change in planning laws, we remain a country with limited space to build houses. The population does not appear to be declining. People have to live somewhere. If they cannot buy then they will rent.
I cannot see prices falling unless our population starts declining significantly and/or people suddenly regain faith in pensions and the equity market, which in my experience seems a long way off.
John Moon
11 Oct 2011 | 09:28
If Kauders is right, the practice of buying Below Market Value property becomes even more attractive. With typical day-one equity of 33% and mortgages representing a percentage of the BMV purchase price (about half of the Open Market Valuation), there is a healthy, safety margin should the market fall as he predicts.
Add to this a healthy return on investment in the form of rental incomes and a family with several BMV/buy-to-let properties can look forward to a financially secure retirement.
John
11 Oct 2011 | 11:16
Dear economists, please stick to what you are good at – reporting on “what has happened and why”, rather than “what is going to happen and when”.
Pointed
11 Oct 2011 | 12:32
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Mortgage broker appeals slammed with higher FSA fines
Mortgage Solutions | 11 Oct 2011 | 13:53
Vicky Hartley
Whilst I have no sympathy for the fraudsters, I do wonder how the FSA decides on the level of a fine as it appears to have no comparison to the legal judiciary system.
Does it think of a number and then treble it and later realise there is no possibility of the fine being paid? Does the person who levies the fine have any legal training or criminal court experience? Or is it simply: “Hey boys, we’re the FSA and can do what we like?”
HW
12 Oct 2011 | 11:44
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FSA chairman ‘spent £66k on first-class flights’
Mortgage Solutions | 13 Oct 2011 | 10:49
IFAonline
To be honest, if he can’t fly first class, who can? You don’t want him sat next to someone cramped into his seat whilst deciding the future of our industry.
J Carter
13 Oct 2011 | 11:37
Aren’t we missing the point here? With past reports of too many influencial persons being careless with confidential papers on trains or in restaurants, please tell me why any company officer, let alone government adviser, is studying confidential papers on any public transport?
John
13 Oct 2011 | 11:46
I do not care whether he studies papers or not, it can still be done in cheaper seats. I would have thought with the economy being as it is and all the costs being born by the financial services industry, that he would have more sense than to wind up IFAs etc. These people have no concept of living in the real world.
Terry
13 Oct 2011 | 11:59
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MIGs: The silver bullet for first-time buyers?
Mortgage Solutions | 12 Oct 2011 | 14:01
Mortgage Solutions
I don’t want to see 95% back and yes, I am a mortgage broker. I’ve had no trouble getting 90% deals even though I’ve had to send some customers direct to the banks for much better deals.
Higher LTVs will only increase prices again and take them out of range for first-time buyers – that is what happened before. HLCs were as big a rip off as PPI, adding a big one off insurance premium to a loan.
Des Platt
13 Oct 2011 | 15:27
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LV= says compulsory protection could ‘decimate’ market
Mortgage Solutions | 14 Oct 2011 | 08:21
Owain Thomas
The word ‘decimated’ comes from the Roman practice of punishing troops by making them kill every tenth soldier… It has largely come to mean ‘devastatingly reduced’ or ‘ruinously affected’. But such a hyperbole does leave you wondering whether the effects are overstated.
Is a 20% take-up rate really indicative that people don’t understand the need? Or merely that they’re not prepared to pay for it unless forced into it – as seen in the motor insurance market.
As the effects are so widely felt, for example in the mortgage market where increased arrears/possessions affects price of lender borrowing, credit ratings and share prices, you’d think the industry would have a more rational view of just why protection is essential.
But then, greed has never been limited to consumers. There is still room for profit within a compulsory scheme if insurance providers were prepared to engage with government and others to develop a sensible compulsory solution instead of carping about loss of profits from a reduction in the current offering.
Tick Tock
14 Oct 2011 | 09:24
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This week’s star comment came from Tim Hague who gives us his thoughts onn whether buyers are unable to escape paying lender valuation fees.
MS poll result: Borrowers “cannot escape” paying lender valuations
Mortgage Solutions | 13 Oct 2011 | 08:00
Simret Samra
I agree that the borrower will pay for the valuation by whatever means. I also don’t expect this to change any time soon. But I do think that the lender paying for it and loading the arrangement fee would be a happier position for all concerned.
The current situation encourages the borrower to believe that they have paid for a survey so they can rely on it to tell them that they are buying a sound property.
But nothing could be further from the truth. The valuation isn’t for them and it doesn’t give them any protection.
If the lender paid for the valuation, at least the borrower might realise they should take out a separate Condition Report as a minimum.
Tim Hague
14 Oct 2011 | 11:18
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Thank you for all your comments
From the Mortgage Solutions team
