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UK banks and lenders suspend offering new mortgages amid market turmoil

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Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#41

Post by sph »

simonswords82 wrote: post #7
highwaylights wrote: post #5

I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…

I’m sorry but I just don’t see how “many will lose their homes”. Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. Evicting people is risky long winded and generally speaking their last option. Unless you've got some data to back up what you are saying in which case I’ll shut up. Edit: Lots of replies saying "but they're not charities etc…

> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments

No, they're in the business of lending money and making sure it's repaid. They're no charity.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#42

Post by mschuster91 »

WithinReason wrote: post #30
mschuster91 wrote: post #11

Earlier quoted context omitted.

> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. German mega-landlord corporation Vonovia announced just a few days ago that they will evict everyone too far behind on payments for heating [1], in order to pacify investors. Never trust rabid capitalism to keep the people in mind. For the beancounters, all that matters is the current st…

Isn't the alternative to say "you can stop paying us because we're not going to evict you no matter what"?

The alternative would be to say "we won't evict you as long as you can reasonably demonstrate you're doing your best, and we will use our significant political connections to fight for more government aid and/or price caps on energy". This is what common-good organization landlords ("Genossenschaften") are doing now.

But that is not the point of what is going on here with Vonovia. The "problem" that Vonovia and other landlords face is that rent raises for existing contracts are capped at 15/20% over three years, while new rent contracts are capped at 10/20% above the "average rent" aka Mietspiegel, which is determined by looking at the last years' worth of new rental contracts. The result is that many old rental contracts are sitting far below average rents... and now Vonovia can abuse the current heating cost crisis to evict people and put the units at current market prices.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#43

Post by dazc »

happymellon wrote: post #18
dazc wrote: post #6

Earlier quoted context omitted.

A more reasonable title but also no mention of the fact that currencies elswhere are also under pressure.

Because that would be whataboutism. There is currently inflation which is being stoked by the current government who is also making statements which don't add up that then makes financial institutions nervous. Mortgage rates jumping from 1.5% to 6% in one year is quite a lot regardless of other people's problems. Freezing new mortgage offers during a very volatile period is understandable and also concerning.

The current strength of the dollar against all other major currencies isn't wahtaboutism, is a basic reason for the current situation that has been purposely omitted.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#44

Post by sph »

the_mitsuhiko wrote: post #22
roenxi wrote: post #14

Not exactly on topic, but a good moment to think - are mortgages even fundamentally desirable? The price of a house is always going to be exactly savings + mortgage, if nobody was taking out mortgages the prices would adjust and people would end up in the same house as before. It is interesting to ask if mortgages should be rare. It isn't obvious why everyone needs to pledge years of their life to the wealthy in orde…

For as long as society thinks home ownership is fundamentally desirable so will be mortgages as most people won't be able to afford a place otherwise. Generally speaking life is so fast and unpredictable for people, that home ownership for many is probably individually a lifestyle choice but a fundamental risk. So I think if you want to question mortgages, it's better to question the entire idea of everybody being fo…

> For as long as society thinks home ownership is fundamentally desirable

I'm in favour of challenging that assumption only iff we make private renting illegal. No one except the public (i.e. the state) should be able to extract payment upon the unlucky masses that do not have or can't afford their own home.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#45

Post by happymellon »

dazc wrote: post #43
happymellon wrote: post #18

Earlier quoted context omitted.

Because that would be whataboutism. There is currently inflation which is being stoked by the current government who is also making statements which don't add up that then makes financial institutions nervous. Mortgage rates jumping from 1.5% to 6% in one year is quite a lot regardless of other people's problems. Freezing new mortgage offers during a very volatile period is understandable and also concerning.

The current strength of the dollar against all other major currencies isn't wahtaboutism, is a basic reason for the current situation that has been purposely omitted.

I think you mean the pound, since this is what we are talking about.

The current situation in the UK is due to economic policy from the past 10+ years. Suppressing interest rates to nothing, and encouraging borrowing for extended periods is not fiscally responsible. Make hay while the sun shines unfortunately did not happen, so now the clouds are rolling in there is no buffer.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#46

Post by SilasX »

simonswords82 wrote: post #7
highwaylights wrote: post #5

I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…

I’m sorry but I just don’t see how “many will lose their homes”. Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments. Evicting people is risky long winded and generally speaking their last option. Unless you've got some data to back up what you are saying in which case I’ll shut up. Edit: Lots of replies saying "but they're not charities etc…

> Mortgage companies are ruthless but not in the business of turfing out families that legitimately cannot afford their repayments.

Are you sure you didn’t mean “that legitimately can afford their repayments [eventually, with penalties]”? (Or perhaps “that temporarily cannot afford the payments”.)

If they cannot afford the repayments, that’s exactly when the lender should reclaim the collateral.

You made an edit, so I’m guessing you reread that part, but it still seems like the opposite of the correct version.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#47

Post by nerdawson »

highwaylights wrote: post #20
highwaylights wrote: post #9

Earlier quoted context omitted.

Time is a factor here, too. The longer they wait the harder it’ll be to get it back under control - which may not even be possible at this stage, given that they’ve grossly underestimated the scale of the problem at every step. The thing that really worries me is that most people don’t understand how any of this works and are still worried about fuel costs. They have no idea that a further (minimum) 1.5% hike is immi…

I appreciate the downvotes from the landlord who thinks they’re an astute investor and not just exploiting someone further down the wealth pyramid. For anyone not aware of this - housing is not a free market, especially in the UK (your tenants are universally forced against their will to rent from you due to nimbyism).

Why are landlords exploitative?

Nobody is being forced against their will to rent a property they don’t want.

Tenants already get plenty of protections that are only due to be strengthened.

Should choice really be limited to owning an expensive asset or accepting whatever the government is capable of providing (council houses aren’t looked upon fondly). What you refer to as exploitation I’d see as freedom of choice.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#48

Post by ID1452319 »

dazc wrote: post #10
highwaylights wrote: post #5

I imagine it’ll nix all fixed rates for a good lot of years. There’s a lot of people that are going to be really hurt in the UK this winter. Many will lose their homes, even those that are renting (who probably won’t see it coming). It’s all well and good to smugly say “you should have understood what you were signing up for” but that doesn’t help people in this situation or their families. It was already becoming im…

Interest rates have been considerably higher in the past though. What is different now is that people have gotten used to an endless supply of cheap credit and thinking they are well off so long as the monthly payments can be maintained. Also, the social media pressure to have the apperance of a perfect life doesn't help.

While that is true, house price inflation has massively outstripped wages. For example, my very first house in 2000 cost £105k. Today that same house would cost £220k. Therefore, what option do people have but to overextend themselves?

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#49

Post by dazc »

happymellon wrote: post #45
dazc wrote: post #43

Earlier quoted context omitted.

The current strength of the dollar against all other major currencies isn't wahtaboutism, is a basic reason for the current situation that has been purposely omitted.

I think you mean the pound, since this is what we are talking about. The current situation in the UK is due to economic policy from the past 10+ years. Suppressing interest rates to nothing, and encouraging borrowing for extended periods is not fiscally responsible. Make hay while the sun shines unfortunately did not happen, so now the clouds are rolling in there is no buffer.

Look at a graph of USD against GBP, Euro and Yen for the past 5 years. I agree with the general sentiment but this isn't a problem that is exclusive to the UK.

Re: UK banks and lenders suspend offering new mortgages amid market turmoil

#50

Post by highwaylights »

nerdawson wrote: post #47
highwaylights wrote: post #20

Earlier quoted context omitted.

I appreciate the downvotes from the landlord who thinks they’re an astute investor and not just exploiting someone further down the wealth pyramid. For anyone not aware of this - housing is not a free market, especially in the UK (your tenants are universally forced against their will to rent from you due to nimbyism).

Why are landlords exploitative? Nobody is being forced against their will to rent a property they don’t want. Tenants already get plenty of protections that are only due to be strengthened. Should choice really be limited to owning an expensive asset or accepting whatever the government is capable of providing (council houses aren’t looked upon fondly). What you refer to as exploitation I’d see as freedom of choice.

It’s exploitative because your counterparty does not have the luxury of choice.

The people who actively work the system to prevent new construction are the same people collecting rents from tenants left without options because of bans on construction.

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