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NAEA hits out at self-serving lenders

The housing market recovery is being threatened by self-serving and stubborn mortgage lenders, the National Association of Estate Agents warns.

Peter Bolton King, chief executive of the NAEA, is warning that any recovery will be strongly dependent on the major lenders making mortgage finance more available.

He says: “The housing market remains in a state of fragile recovery as the year ends. Frankly, however, this recovery is threatened by the stubborn refusal of major lenders to loosen their self-serving restrictions on mortgage lending.

“A historically low rate of interest has benefited those people who already have a mortgage, but it is likely that over the next 12 months it will rise.

“That will place more pressure on existing borrowers but also remove mortgages from the reach of even those house buyers with large deposits.

“The danger is that a backlog of pent-up demand for property emerges. That means the market will suffer from lack of demand in the short term and potentially be distorted by a rush of demand when these people can finally get onto the ladder.”

But he does not expect a widespread fall in house prices over the next 12 months but there may be ups and downs.

He says: “What we will see is the emergence of ‘postcode power’ – as demand for property in some areas fuels a healthy market while other, less desirable areas, are in danger of being left behind.”

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  • anon 3rd December 2010 at 3:56 pm

    I am not an estate agent.

    However i do find it rather distastful at the critical rhetoric aimed at agents from those within FS.

  • John 3rd December 2010 at 12:46 pm

    I suppose that’s in sharp contrast to the consistently altruistic behaviour of estate agents.

  • sgingy 3rd December 2010 at 9:57 am

    If he is so confident, why doesn’t HE lend money to some of the self-certified low income borrowers coming through his door? Go on. A private loan agreement for 25 years at 6% on a house YOU have valued – after all, you are sure of no price falls coming, so why wouldn’t you make some easy money Mr Boton?

  • Ukhousehunter 3rd December 2010 at 7:06 am

    Mark Skdders | 2 Dec 2010 5:18 pm
    Mr Boton talks a lot of sense in my book…..I’ve been saying similar things for months and have been all but told I’m an idiot – well said Sir

    Sorry Sir, but you are.

  • alan jones 2nd December 2010 at 11:56 pm

    What’s behind the smile. Does he really believe what he is saying.I don’t think so.Scapegoating has always been an easy way of distracting from uncomfortable realities. As Mr Bolton is fully aware the Uk property market is not only overvalued but the estate agents he represents have played their full part in making it so.

  • When will they learn? 2nd December 2010 at 8:17 pm

    Carping about banks not lending the crazy sums they previously had suggests to me that someone hasn’t learnt a lesson from recent history.

    If prices are allowed to (softly) correct to sensible mutliples of income, such that an average man on an average wage can afford an average house, pay it off in 25 years (capital and interest), then sales volumes will return and the estate agents can carry on happily.

    House prices that get ever further beyond the reach of the beloved first time buyer don’t help the situation. It’s nothing less than crass stupidity to suggest that we (after all, we own a lot of the lenders now) should always lend them the required amount to ‘get on the ladder.

  • Stuart Law - Assetz plc 2nd December 2010 at 7:56 pm

    The fact remains that property is only down 6% or so from peak as a direct result of excess demand over supply and this even with lenders so reluctant to lend. There are those with vested interests in prices going up to make more sales to a confident public and those with vested interests in prices going down to get a bargain. It remains interesting to watch the latter but the positive factors are strong as shown in the speed of the recovery in prices. Rents are now surging and this will support more lending to Buy to Let as well as supporting prices.

  • T.E. Chieman 2nd December 2010 at 6:14 pm

    He sounds like an old smug dog to me- but a bit grumpy too. If the current interest rates don’t go up though, it’ll take me ten years to get my money back from the lot I’ve lost on interest. It’ll be a happy Monday when the banks do rumble what’s needed to right the Credit crunchy – Just what we need with bankers less flash man and more quiet guy.

  • Clive 2nd December 2010 at 6:09 pm

    The housing market recovery is being threatened by idiotic estate agents and unrealistic sellers. Recovery = affordable prices and good transaction volumes. So stop moaning about the banks (they deserve criticism but no in this regard) and get to work valuing properties at realistic levels. Hardly any agents I encounter have a clue how to put together a deal, having only experience boom conditions. The days when thousands in commission could be raked in simply for passing on offers on until one was accepted are gone. Learn the art of proper negotiation or go bust!

  • Victor 2nd December 2010 at 5:55 pm

    This guy’s ‘analysis’ and ‘predictions’ are laughable and manfestly self- serving. What does this nonsense mean? People can’t get mortgages… Then he says there will be a sudden rush of people getting mortgages even though interest rates are going up. Then he says prices won’t fall. Sounds like a load of crock.

  • Mark Skdders 2nd December 2010 at 5:18 pm

    Mr Boton talks a lot of sense in my book…..I’ve been saying similar things for months and have been all but told I’m an idiot – well said Sir

  • Sir Smeg 2nd December 2010 at 4:24 pm

    The global economy crashes as a result of reckless lending on over priced assets. Sanity returns with sensible lending but the assets are still 20-40% overpriced by just about every measure. This moron thinks that the market is being held back by “the stubborn refusal of major lenders to loosen their self-serving restrictions on mortgage lending.” Someone slap him please he is in desperate need of a dose of reality. It is idiots like this that got us into this mess in the first place!

  • Tom K 2nd December 2010 at 3:45 pm

    Well if I was running a bank, and wanted to minimise exposure to risk, then I wouldn’t be lending much right now, as its clear houses remain 20-40% over-valued according to all conceivable historic measures.

    You do hear ‘it’s different now’ bleating from some quarters but that wouldn;t be enough to get me lending again till the falls had taken place and my risk was once again minimised.

    Estate agents: it’s over to you to talk some sanity into vendors to accept the inevitable, that 2005-6-7 prices are gone, never to return (not for a decade at least).

  • Ancient Wisdom...is a mortgage broker in N3 2nd December 2010 at 3:36 pm

    ..lenders wont want to offer generous LTV’s and income multiples/affordability in the current climate and if Peter Bolton King cant understand why by now, he should spend a month as a broker.

    The natural stabilisation is occuring as we sepak and the majority of the housing market, and lenders dont want to take any more risks on risky applicants or properties any longer.

    Peter Bolton King – expect prices to fall by around 8-12% in 2011, and a recovery is at least 4 years away.

  • Garth Timms 2nd December 2010 at 3:21 pm

    Ha ha, typical estate agent showing why he wasn’t bright enough to do anything better!! Of course it’s self serving, essentially you are demanding that banks share holders lend on a falling asset.

  • A Has Been 2nd December 2010 at 3:18 pm

    Agree with GHU. Rich coming from an EA!!

  • David Carter 2nd December 2010 at 2:03 pm

    A timely and pertinent observation by Peter Bolton King. The marginal easing of LTVs that we have seen does nothing to feed the mortgage hunger, particularly for that critical group of potential first time buyers upon whom many knock-on sales depend. As a generalisation, my experience is that lenders seem focused on finding ways of disrupting the lending process rather than facilitating transactions.

    I fail to understand why there should be such a large discrepancy between those on existing tracker rates and those trying to source a new fixed or tracker loan. Money supply? Increasing profits (othewise sanitised in the term ‘balance-sheet rebuilding’)

  • Gray Haired Underwriter 2nd December 2010 at 1:59 pm

    Typical Estate Agent – has absolutely no idea of the realities of finding mortgage funding or indeed the cost of those funds or the capital requirments laid down by the FSA. Wonder how he would feel if he borrowed money at 3% and was then forced to keep a quarter of it in a Government bond paying 0.5%.

    And as for the self serving statement!! talk about glass houses and stones. Sorry but I have worse experience of estate agents than of any other group involved in property. For some unknown reason they think they can question and berate the lender about an application that they have no legal right to get involved with.

  • Charles Haresnape 2nd December 2010 at 1:44 pm

    In the interests of balance I wonder if a large lender wishes to comment on cost of funds, capital allocation costs and therefore true margin and availability of capital for higher LTV?

  • John Lacy 2nd December 2010 at 1:42 pm

    I’m sorry Mr Bolton King but your ignorance is showing. The banks don’t have the money to lend—no ifs, buts or maybes they haven’t got the money and will have even less next year when they have to start paying back the money from the Special Liquidity Scheme.
    The market should have been allowed to correct fully first time round but because of ill-planned meddling we will now have a poor market for probably another 5 years.