To think capped mortgages will make it harder for FTB

[Molocosh]

www.bbc.co.uk/news/business-53084853

In the past few weeks I’ve seen several threads where the OP has asked if there’s going to be a house price crash due to the coronavirus recession. So I’m interested to see that mortgage lenders are beginning to cap mortgage lending. Nationwide has said the maximum they will lend is 85% so you need 15% deposit (previously 5%). This means houses are less affordable because people can’t borrow as much, and imo this will lead to FTB still being unable to buy even if prices drop.

It just means they will have to delay buying,or get the house at a better price.
I understand some are looking at offering around ten percent lower than asking price.
It is just to protect the banks.They do not want to be loosing their money in negative equity,so it is really down to the buyer if they want to risk it

My shared ownership house is currently on the market as I’m trying to relocate. I thought it would definitely attract first time buyers, like I was, but the only viewings so far have been people selling their flats. (And the only offer so far was £15k below the valuation so housing association won’t accept). So I agree the capped mortgages at the moment are sowing things down for me

It won’t last, the lenders are minimising their exposure at the moment until things level out. They will compete with each other to get the business again once lockdown ends / the situation improves.

No, YABU it's a good thing if prices fall because people can't borrow as much. High house prices are a disaster and one of the reasons why there are so many problems in society. Housing should never have been financialised and house prices need to come down drastically.

And 100% mortgages were one of the reasons why we had the financial crisis. Looks like the banks and building societies agree there is going to be a house price crash though if they will lend a maximum of 85%, so 15% drop, good news for all the poor people who can't currently afford a home!