Help to Buy (Votes) brought forward by 3 months

[RedSauce]

Lloyds Banking Group are one of the few lenders who have committed to offering loans through Help to Buy 2, but other lenders have been cautious about offering a commitment until they find out how much the guarantee will cost and whether they will get capital relief on the high LTV loans offered through the scheme (Taken from Mortgage Strategy)

My opinion is that I'm not convinced that lenders are in a position to be able to offer this scheme yet. Many are already struggling with increased business volumes and simply dont have the resources to deal with more.

Why do you think they started this earlier than anticipated?
- Worried that the house price rises by "good news" stories could only continue so far?
- Worried about more and more people and institutions criticising the policy as the January launch date got closer?

Stinks of desperation, and if what you say about lenders not offering the mortgages to underpin the scheme then it is destined for failure

[Martin@AS Financial]

Are you suggesting we need to print more money cos the banks are running out?

Not at all.

By resources I mean that lenders will need to become more efficient. During the credit crunch, banks scaled back costs by getting rid of lots of their processing staff as they no longer had money to lend. Through the funding for lending scheme, banks now have money to lend in the form of cheap mortgages but they still operate with the skeleton staff levels from 2008 which leads to long delays in turning mortgage offers around. There are a number of lenders that are taking 6-7 working days just to look at an application before deciding what documents they need to underwrite the case.

The introduction of help to buy 2 is going to put increased pressure on banks and I personally do not think they are ready or will be able to cope with the business levels they will receive.

[Old Greg]

Are you suggesting we need to print more money cos the banks are running out?

Are you trying to tell us something prawny? Have the banks run out of money?

[Martin@AS Financial]

Why do you think they started this earlier than anticipated?
- Worried that the house price rises by "good news" stories could only continue so far?
- Worried about more and more people and institutions criticising the policy as the January launch date got closer?

Stinks of desperation, and if what you say about lenders not offering the mortgages to underpin the scheme then it is destined for failure

All of the above plus the announcement has been timed perfectly with the annual Conservative Party conference

[DimPrawn]

Are you trying to tell us something prawny? Have the banks run out of money?

Osborne bats for bankers' bonuses citing risk to City from EU cap | Politics | The Guardian

[fullyautomatix]

I just cannot understand this HTB scheme. Its the most daft idea ever.

The pre 2008 crash was a direct result of banks lending like there was an endless money supply to whoever wanted a mortgage and from 2003 - 2007 it resulted in a major increase in house prices which was disproportional to the wage increase. I have seen people on benefits applying to mortgage and people on tax credits applying for mortgage. There was a time when Northern Rock was offering 125% mortgage. This is what distorted the market and enabled people who didnt have the money to afford a house to speculate on houses.

Since the banks were bailed, obviously they have gone back to the drawing board and only lend if you have 25% deposit which is how it should have been, and house prices have started to correct themselves. But the government wants to meddle now and start a house price boom again. What crap.

[fullyautomatix]

Not at all.

By resources I mean that lenders will need to become more efficient. During the credit crunch, banks scaled back costs by getting rid of lots of their processing staff as they no longer had money to lend. Through the funding for lending scheme, banks now have money to lend in the form of cheap mortgages but they still operate with the skeleton staff levels from 2008 which leads to long delays in turning mortgage offers around. There are a number of lenders that are taking 6-7 working days just to look at an application before deciding what documents they need to underwrite the case.

The introduction of help to buy 2 is going to put increased pressure on banks and I personally do not think they are ready or will be able to cope with the business levels they will receive.

What a load of tulip. You are talking nonsense. Almost all of mortgage application process these days is automated end to end. You dont need thousands of staff sitting and typing away to process the applications. Also banks know how to scale up and down rapidly when it comes to staff recruitment.

Whatever daft scheme the govt comes up with, the banks will eye it all with a bit of suspicion. The only sensible lending is for someone with a 25% deposit. Nothing less than that, no matter what guarantee they get.

[Martin@AS Financial]

Almost all of mortgage application process these days is automated end to end. You dont need thousands of staff sitting and typing away to process the applications.

Really?

Banks today are a lot more cautious and rarely agree to a case without there being some sort of human intervention. Documents still need to be checked whether it is payslips, accounts, SA302's, proof of deposit etc and this is certainly not an automated process.

[Doggy Styles]

Really?

Banks today are a lot more cautious and rarely agree to a case without there being some sort of human intervention. Documents still need to be checked whether it is payslips, accounts, SA302's, proof of deposit etc and this is certainly not an automated process.

Indeed. They intend to apply more robust credit checking than in the past. Only the HMG part-owned banks will be under pressure to make loans in any numbers.

[fullyautomatix]

Chap down the road from me has just lost £15k on his house.

Bought at the top, been for sale for yonks coz his wife "found the garden was too big".

It's the same fecking size garden now as it was when you bought the fecker.

<shakes head in amazement>

This is what happens if you speculate on a house. Buy a house to live in and you should be okay.