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JoeDavola

Has Coronavirus officially killed the housing market?

Post-Covid, what 3 changes are you going to try to make? (max 3)  

119 members have voted

This poll is closed to new votes
  1. 1. Post-Covid, what 3 changes are you going to try to make? (max 3)

    • Work from home more
    • Walk more (drive less)
    • Avoid Chinese goods
    • Shop locally
    • Quit working (bennies)
    • Retire earlier
    • Leave the UK
    • Come back to UK
    • Cook more own food
    • Eat out more
    • See family more
    • See family less!
    • More time on hobbies
    • Worry less
    • Get divorced
    • None of the above


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Posted (edited)

Surely this is massive news:

https://www.bbc.co.uk/news/business-52106119

Quote

On Tuesday, Nationwide - one of the UK's biggest lenders - effectively pulled out of new deals.

and

Quote

Other lenders that have taken similar action include Santander and Skipton Building Society but many have gone further, by reducing the loan-to-value ratio to 60%.

That means borrowers will need a 40% deposit or equity in their home to be able to get a mortgage.

Lenders that have done this include Barclays, Halifax, Virgin Money and The Family Building Society, while the Coventry Building Society has cut its LTV ratio to 65%.

 

....who the fuck has a 40% deposit?

Edited by spunko
adding pollllllll

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Posted (edited)
3 minutes ago, JoeDavola said:

Surely this is massive news:

https://www.bbc.co.uk/news/business-52106119

and

 

....who the fuck has a 40% deposit?

Only those that aready own a house this could get interesting but the question must be what do the banks know about that we don’t yet 

Edited by stokiescum

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1 minute ago, JoeDavola said:

Well the requirement for a 40% deposit is the banks protecting themselves against 40% price falls isn't it.

Yes your right I’m still not fireing on all cylinders after last night wee tipple 

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6 minutes ago, JoeDavola said:

Well the requirement for a 40% deposit is the banks protecting themselves against 40% price falls isn't it.

And also closing off anyone who has a fixed deal coming to an end. They will have to go on to the bank's SVR as no remortgage possible.

So banks making out like bandits again. What a feckin surprise.

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3 minutes ago, Wight Flight said:

And also closing off anyone who has a fixed deal coming to an end. They will have to go on to the bank's SVR as no remortgage possible.

So banks making out like bandits again. What a feckin surprise.

I feel like a chose a better sector to be working in than banking for this crash (unlike the last one).

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This has been going on for over a week now: https://forums.moneysavingexpert.com/discussion/6119323/barclays-just-rang-and-told-me-all-new-mortgages-require-40-deposits-now

I am more surprised that it has only just made the news.

I have posted about this in the other thread but reposting it here.

 

 

Screenshot_2020-03-31 Google Trends.png

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12 minutes ago, Wight Flight said:

And also closing off anyone who has a fixed deal coming to an end. They will have to go on to the bank's SVR as no remortgage possible.

So banks making out like bandits again. What a feckin surprise.

It always amazed me how few people took out even a 5 year fix at these low interest rates.

Everyone I know is on short term deals, say 2 years max, because the most important thing for them was rock bottom interest rates over medium/long term stability.

My plan was always gonna be a 5 or a 10 year fix, knowing I'd have to pay slightly higher interest, but then again I'm a boring bastard.

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Just now, JoeDavola said:

It always amazed me how few people took out even a 5 year fix at these low interest rates.

Everyone I know is on short term deals, say 2 years max, because the most important thing for them was rock bottom interest rates over medium/long term stability.

My plan was always gonna be a 5 or a 10 year fix, knowing I'd have to pay slightly higher interest, but then again I'm a boring bastard.

I'm 4 years into a 5 year fix.. typical.

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4 minutes ago, spunko said:

This has been going on for over a week now: https://forums.moneysavingexpert.com/discussion/6119323/barclays-just-rang-and-told-me-all-new-mortgages-require-40-deposits-now

I am more surprised that it has only just made the news.

I have posted about this in the other thread but reposting it here.

From the thread:

Quote

Before everyone panics too much, the article linked to above says Barclays have withdrawn most of their products from the market because their underwriting is done at offices in India which have had to close due the nationwide full lockdown there. That means Barclays simply have little to no capacity to process applications right now, so they've pulled most products so they only get a few applications. They say they'll be relaunching their products as soon as they can. 

 

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One way of causing the market to crash I guess.

Goes against my usual thinking - but perhaps it's time the gov just offered this direct. No free money to banks, no guarantees, just go direct to the public. 

Long term it would work well and add stability when needed - had the correction already happened in 08 that is, now it'll be another can kick.

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27 minutes ago, stokiescum said:

Only those that aready own a house this could get interesting but the question must be what do the banks know about that we don’t yet 

Coincidentally I received an email from Vanguard Asset Management clarifying their treatment of cash holdings. It emphasized that cash was held in a trust account but Vanguard were not liable for any default by the bank. :ph34r:

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I get some emails for a HK based fund manager who sometimes doesn't know his own email address so uses mine.

He/I received this one today.

Quote

Dear Trevor ,

We wanted to personally message you in light of the current global uncertainty with regard to COVID-19. The FCT Property team hope that you and your family are all happy, healthy and safe during this time. 

We would like to assure you that although COVID-19 is likely to push us into a period of reduced activity, we still see London property as a safe asset class for our investors, particularly during uncertain times like these. The first three months of 2020 saw a 2% price growth in London property fuelled by greater political certainty and we expect to see the London stock market make a steady recovery in the future as it has previously done following the 2008 economic recession. 

The volatility in the currency markets has opened up opportunities for all our overseas landlords. The pound had slumped to its 35 year low, around 1GBP to 8.8HKD. At the time of writing this to you, GBP has made a slight recovery, now at 9.6HKD, however this still remains undervalued compared to historical rates. We also see further urgency with the Chancellor Rishi Sunak cutting the Bank of England's interest rate to 0.1%, making now an excellent time to transfer your HKD and borrow in the UK. Overall, the UK's response has provided us with confidence in the future of its economy, with the UK government standing by businesses and workers, which will safeguard the economy.

 

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Until there are some forced sales, it's impossible to know what will happen with house prices. If banks are prevented from taking possession - either by the government stopping them or by the practicality of doing so during a lockdown - then there is unlikely to be much price discovery going on. 

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5 minutes ago, TheBlueCat said:

Until there are some forced sales, it's impossible to know what will happen with house prices. If banks are prevented from taking possession - either by the government stopping them or by the practicality of doing so during a lockdown - then there is unlikely to be much price discovery going on. 

Yes even pre-pandemic here in NI people tend to just put houses on the market at kite-flying prices and leave them on 6 plus months if they don't sell and never think about dropping the price.

I think there will have to be forced sales in order for prices to drop, but the interesting thing will be how it affects FTB-ers and the amount of credit they can get their hands on.

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It's surely just on hold at the moment - though I hadn't heard that about the deposits.

Though I think this will be the final straw for a lot of BTLers and property portfolios will get dumped onto the market so crashing it about a yera down the line when the banks realsie that it's best to panic first and send them to auction.

Also anybody who has borrowed agaisnt their house to start a small business may well have it repossessed leaving even more in the hand sof the banks.

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5 minutes ago, Frank Hovis said:

Also anybody who has borrowed agaisnt their house to start a small business may well have it repossessed leaving even more in the hand sof the banks.

That's the kicker. Loads of overleveraged small business owners about, I know one with a graphic design agency who sadly took out a loan against his house to save his dying business - before Covid struck. Work has gone from being -50% down to -90% down for him now and there's only so much the government can do. Even if the 3 week restriction doesn't get extended, there's very little money left for small businesses to be spending on non-essentials after normal service resumes. I have to be honest I don't think people are considering how severe the depression will be in a few months.

 

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I see the 'Axe The Tenant Tax' lot have been pondering lobbying the government to make some coronavirus adjustments to Section 24 to alleviate some pressure on them.

The delusion is mind boggling. I can't imagine the sort of mentality that thinks any government will entertain the idea of reducing tax on landlords at a time that many other taxes will have to go up.

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I find it fascinating that the media can only report it as being because of staff shortages and don't even mention the obvious -- that the specific focus on the LTV criteria required to get a mortgage through can only mean that they're worried about the value of the collateral going forwards.

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1 hour ago, spunko said:

That's the kicker. Loads of overleveraged small business owners about, I know one with a graphic design agency who sadly took out a loan against his house to save his dying business - before Covid struck. Work has gone from being -50% down to -90% down for him now and there's only so much the government can do. Even if the 3 week restriction doesn't get extended, there's very little money left for small businesses to be spending on non-essentials after normal service resumes. I have to be honest I don't think people are considering how severe the depression will be in a few months.

 

There are a load of places in Nottinghams arts quarter, all artisan type setups etc that have probably already gone to the wall or will be doing shortly. Shame as it makes it a nicer place without all the big chains.

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