The UK housing market is seeing the same sort of credit stress as we are on this side of the pond. In the FT’s article Mortgage product market squeezed (non-subscription vers)
There are now just 2,282 home loans from which borrowers can choose – less than half the number of products available one year ago and more than 90% below the 27,962 available in July 2007, according to the comparison site moneysupermarket.com. First-time buyers can access 1,195 mortgage products down from 17,756 in July 2007.
A similar thing has happened in the US.
While choice is a good thing, I saw the large number of mortgage product choices during the credit boom as more of a reflection of loose lending standards, a symptom of the problem.
I’m not sure fewer choices aren’t a bad thing. Am I missing something?
Would someone explain to me how there can possibly be 2,282, let alone 27,962 different mortgage products? Surely there is some spin in the numbers reported. Is it possible there are something like 30 different kinds of mortgages and that number is multiplied by the 100 surviving lenders to equal 3,000 mortgage products? I’m guessing. Actually, what the heck is a mortgage product?
OK. I looked up the definition of mortgage product, which there is not. Anybody know what they are. Several sites use the terms in context, but in a variety of ways. None of them have 2,282 of ’em. I think Jonathan you are correct. The UK chart is picture of tighter lending and the exodus of lenders rather than one entirely of diminishing numbers of loan alternatives. But, I really don’t know. What does mortgage product mean. There should most definitely be an article specific lexicon for real estate stuff and a rule that you can’t invent terms without vetting and permission. When cows fly, you say? How can commentary, including appraisal reports, be credible if they include terms no-body knows?
So much for the UK chart as far as I am concerned. It’s useless junk. I have a feeling they intended to show us something, but what they did is meaningless until we know what the mortgage product they are charting is.