| |
Major Site Upgrade in Progress |
 |
|
 |
|
Shahla
Money Managing Guru
Joined: 13 Nov 2004
Posts: 3324
Cash Points ££ 126163.28
|
|
|
 |
|
 |
|
 Posted: Tue Apr 15, 2008 1:25 am Post subject: UK Housing Mortgage Market Crunch Time |
 |
|
|
 |
|
 |
|
|
|
|
By: Nadeem_Walayat
The UK housing market continues to trend lower towards the Market Oracle forecast of negative house price inflation on release of Aprils house price data in May. The Housing market was hit today by further news of withdrawal of more mortgage products that has seen the mortgage products market now shrink by 2/3rds from a year earlier. First Direct announced that it would no longer be offering mortgage products to new customers. This follows hot on the heals of many banks and building societies making borrowing far more difficult, the aim being to reduce their exposure to the UK mortgage market.
We have repeatedly warned of the consequences of this trend due to two factors.
1. The inter bank money market liquidity squeeze, which has seen inter bank rates soar back above 6% in recent weeks despite two Bank of England base rate cuts. The Bank of England is also trying to counter the liquidity squeeze by releasing tens of billions in extra funding for the banks. The banks are still reluctant to lend to one another given the risks of default and this also means the banks are more reluctant to lend to customers, some of the ways of limiting business is by making the lending criteria much tougher and by charging high rates of interest and fees as especially mortgage banks brace themselves for losses from a faltering UK housing market.
2. Northern Rock Bank - The nationalisation of the bank has resulted with the banks intention of repaying the UK Government the £28 billion outstanding within the next 4 years. The way the bank will achieve this is by shrinking the banks business by forcing customers through high mortgage interest rates to remortgage to other banks. Thereby the bank would utilise the funds from repaid mortgages to repay the UK government instead of for new lending. Already the bank has shrunk the original debt by £3 billions, as more customers are forced to remortgage to other banks. This creates an upward pressure on mortgage interest rates that will continue for several years.
The housing market will continue to buckle under the strain of the credit crisis. House Prices that in many cases demand X7 salaries will increasingly be unable to find any buyers as the banks are no longer willing to take on risks of more than X3.5 salary. Therefore the UK housing market remains on track for a significant bear market the initial forecast for which is for a 15% drop from August 07 to August 09.
Important UK Housing Market Articles http://www.marketoracle.co.uk/Article4188.html
1st May 07 - UK Housing Market Heading for a Property Crash
22nd Aug 07 - UK House Prices to fall by 15% over two years, falling prices to be accompanied by cuts in UK interest rates.
25th Sep 07 - UK Housing Market on Brink of Price Crash - Media Lessons from 1989!
28th Oct 07 - UK House Prices - Primary Reasons For a Sharp Fall
10th Nov 2007 - Crash in UK House Prices Forecast for April 2008 As Buy to Let Investors Sell on Capital Gains Tax Change
02 Dec 2007 - UK Housing Slump Gains Momentum as Properties Fail to Sell at Auction
05 Dec 2007 - UK Home Owners Unable to Refinance Mortgages As Fixed Rates Expire During 2008
07 Dec 2007 - Analysis of Interbank and Base Interest Rate Spread
21 Dec 2007 - UK Commercial Properties Crash Looms as Property Investment Fund Frozen
07 Feb 2008 - UK Interest Rates Cut to 5.25% - Will Not Help the Housing Market
26 Feb 2008 - UK House Prices Fall for 5 Months in a Row- Housing Market Will Go Negative April 08
11 Mar 2008 - RICS Data Confirms UK Housing Market Heading for 1990's Style Crash
By Nadeem Walayat
Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.
Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 120 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities. |
|
|
|
|
|
|
 |
Online Finance Tools & Calculators |
 |
| Credit Score Calculator |
Easy to use online Credit Scoring tool - Calculate your credit score now online for FREE ! using the Moneyforums.co.uk credit scoring tool. Also TEN Tips on improving and mainting a good credit rating ! |
|
| Quick Health Calculator |
Easy to use quick health calculator to help you get started on the path to fitness. Calculates your body mass index (BMI). |
|
| "When will I die ?" Calculator |
Calculate when will you die based on your current life style and then more importantly what you can do about extending your lifespan ! |
|
| Mortgage Calculator |
Easy to use online Mortgage calculator tool - Calculate how long it will take to pay off your mortgage and what your monthly repayments will be as well as interest charged per month per each year. |
|
| Savings Calculator |
Use the flexible savings calculator to estimate the amount of interest you would earn given a level of monthly savings, with many optional settings. |
|
| UK Tax Calculator |
Check your tax and NI liability using this easy to use online tool. Outputs, Tax, Ni, Net pay and gross pay on an annual, monthly and weekly basis, also estimates your tax burden and the number of days a year you work for the tax man ! Plus lots of tax saving tips. |
|
|
 |
|
 |
|
Money
Forums Guides |
|
| Credit
Card Stoozing |
The
following guide explains the basics of credit
card stoozing in a step by step basis. |
|
| Discount
Vouchers |
Online
discount vouchers giving upto
50% off in stores such as Dixons,
Tesco, Avon, Currys, Boden and more. Many
of the vouchers are time limited - So check
back regularly |
|
| Money
Saving Guide |
Guide
to saving money on household bills & personal
finances - Start saving thousands of £'s
every year TODAY ! |
|
| Savings
Tree |
A
guide to Savings Accounts, from Cash ISA's to
Regular Savers to Premium Bonds, all explained
in an easy to understand manner. |
|
|
Users
Groups | Profile
| Messages
| FAQ | Sponsers
& Links | Member
list | Recommend this site | Top Money Saving Sitee
© 2004 - 2007 Moneyforums.co.uk / Market Oracle Ltd - Asserts copyright on all topics & posts made on this site. Moneyforums are open forums, and thus posts are NOT endorsed by Moneyforums.co.uk / Market Oracle Ltd . Any and all information provided within the Website is for general information purposes only and nor is or shall be deemed to constitute, financial or other advice. We recommend that independent professional advice is obtained before you purchase any product and/or service. All tools and guides are provided as is for general information purposes only.
|
|
|
