Skip to main content

House builders discuss 95% mortgages with lenders

So the house builders and the lenders have had a meeting to discuss how they can create 95% mortgages. Basically a good thing, as you would imagine most estate agents would say. But what proportion of the housing Market is represented by new homes sales to first time buyers? Also any first time buyer who purchases a new home is then a cost to the second hand Market of who knows how many sales!

If I think back 30 years my wife and I as first time buyers were providing a deposit of 10%. To do this we sold her car, saved up by not going out as much and generally committed ourselves to the task of buying our first home together. Ah, you might say, but house prices were so much cheaper then. True but my salary was just under £2,000 per annum with the prospect of perhaps another £1,000 in commission from selling at lease 6 houses per month personally. The first 4 didn't count towards commission but were to cover my costs to my employer!

I personally don't think 95% mortgages are what it's about. 90% is OK but today's first time buyers have to seriously want to do it! If that makes me sound old-fashioned then so be it. At least today's FTB's are not contending with galloping house price inflation. Qualifying for the mortgage is another can of worms. Freely available credit has enabled lots of youngsters the opportunity to get themselves a bad credit rating. The first whiff of this sort of problem and an application is rejected. Broadly this is seen as reigning in 'bad lending' but we have seen the extremes where minor misdemeanours create the same rejection.

The only way the Market as a whole will be motivated again is for reasonable lending to be restored - not just to to the new homes Market!

Comments

James said…
Hi David,

Great perspective and thanks for the comment on our linkedIn discussion. Would you consider adding us to your useful links? (www.thebigpropertylist.co.uk)

regards,
James
Unknown said…
Really this is nice blog thanks for the time you took in writing this post. You’ve an inspiration for me. You know more about the Builders Ipswich visit at Builders Ipswich
Peter Stannard Homes have been building premium homes Builder in Perth, Western Australia for over 45 years. With single storey homes, second storey homes, and off the plan homes, Peter Stannard can build the right home for you.

Popular posts from this blog

Canvassing For Business

I can remember back in 1990/91 when I was with the forerunner of this firm (my god that's nearly 20 years ago!) that we were in the middle of a property market down turn that I personally believe was far worse than the current one. Osbornes Property Services as we were then called was suffering from a serious lack of income that also had a root in a serious lack of good saleable property to sell.

We were new, very professional, very keen, very hardworking and very keen to please but no one had heard of us. Our marketing budget was limited - we were skint to be truthful! What did we do? Well we set about making people aware of us by 'canvassing'. I wrote letters to other agents vendors, I dropped leaflets, we advertised as imaginatively as possible saying that even in that market we needed property for sale. Did it work? Yes to a degree and we certainly wound up some of the more established local estate agents who were not keen to lose instructions to newcomers like us.

20 ye…

£10k refit competition ??

I have just returned from hospital having had a procedure carried out on my foot/ankle that involves repairing a damaged tendon and realigning my foot by breaking my heel! While waiting to be called down to theatre I sat in my room checking e-mails - as you do when you want to take your mind off things.

There was an e-mail from Colin Clayton of Desk Centre Limited http://www.deskcentre.co.uk talking about a £10,000 office refit and all I had to do was create a blog post suggesting why my office should be the one to receive it! What an opportunity - here I am laid up for two weeks before I can mobilise on crutches and my office certainly would benefit from a revamp in 2013.



Like most surviving, small, independent estate agents we have done this by cutting costs, reducing premises and regrettably letting staff go. Our address used to be 20-22 Market Place but is now 20 Market Place only. We originally moved to No.20 from our first premises in Newnham Street in 1993- my then business par…