Will Banks Ever Relax Lending Again?

Brett Alegre-Wood
November 19, 2020

London Property always kicks off first

London Property market is starting to move. If you have the money to buy and you have done your due diligence, I will say go for it!

Simon: just said when do you think the bank will start relaxing lending again?

Banks there's two things I don't think bank lending is a problem right now from them not having money to lend or the fact that they don't want to lend. I think the the problem is they've come from austerity with Brexit so they've they've actually scaled back their operations and all of a sudden they've got a massive you know influx and they just can't handle them.

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It's a very different market in Scotland, it's a smaller market. There's some fundamental changes namely oil and gas with all the issues there and that I know Aberdeen and a few of those places house prices have dropped considerably. So, it depends on how that's reacted.

I think right now they've tightened the criteria so they're only getting the very best of applications so when will that thing. I think what we'll do is things will start slowing down over Christmas even though I said that would start happening in October it didn't you know maybe it'll start happening now in November with a lockdown we'll see.

But look when do I think spring next year we'll probably start seeing things open up a bit more and we'll know where the unemployment figures are. Watch the unemployment figures what's happening there if they start to shoot up massively then we are into problems. I don't think they will because of the furlough scheme because the job support scheme coming after that a lot of employers haven't let go of their staff and that's a good thing.

If you think about this guys, if I let go of staff member and just because things are slowed down what happens I have to then rehire that staff member or that staff member has to go and get another job now that whole process of an economy takes about two years. What'll happen is it'll shed a lot of jobs yeah and in fact unemployment rate will go up but then what will happen is over the next two years that unemployment rate will come back down again as the economy gets back on its feet and i think that's the important thing.

So when do I think they'll start letting in I think they'll start lending again once number one is once they see what's happening with unemployment and when they actually get through this run of um applications you know we'll probably see that pick off. 

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Make no mistake they want to lend I used to run a mortgage company and so we used to do this you know if we if we we would take say a 10 million tranche of money and if we're at 8 million and we had like 50 applications come in we would immediately just change our criteria so I've got was really hard because we knew we'd have to go get that repackage and get rid of that and get a new 10 million in you know otherwise we couldn't lend. That's just natural what you do you know and you know that's that's what's happening here I think.

Video Transcription

Simon: just said when do you think the bank will start relaxing lending again?

Banks there's two things I don't think bank lending is a problem right now from them not having money to lend or the fact that they don't want to lend. I think the the problem is they've come from austerity with Brexit so they've they've actually scaled back their operations and all of a sudden they've got a massive you know influx and they just can't handle them.

I think right now they've tightened the criteria so they're only getting the very best of applications so when will that thing. I think what we'll do is things will start slowing down over Christmas even though I said that would start happening in October it didn't you know maybe it'll start happening now in November with a lockdown we'll see. But look when do I think spring next year we'll probably start seeing things open up a bit more and we'll know where the unemployment figures are. Watch the unemployment figures what's happening there if they start to shoot up massively then we are into problems. I don't think they will because of the furlough scheme because the job support scheme coming after that a lot of employers haven't let go of their staff and that's a good thing. If you think about this guys, if I let go of staff member and just because things are slowed down what happens I have to then rehire that staff member or that staff member has to go and get another job now that whole process of an economy takes about two years. What'll happen is it'll shed a lot of jobs yeah and in fact unemployment rate will go up but then what will happen is over the next two years that unemployment rate will come back down again as the economy gets back on its feet and i think that's the important thing. So when do I think they'll start letting in I think they'll start lending again once number one is once they see what's happening with unemployment and when they actually get through this run of um applications you know we'll probably see that pick off.  Make no mistake they want to lend I used to run a mortgage company and so we used to do this you know if we if we we would take say a 10 million tranche of money and if we're at 8 million and we had like 50 applications come in we would immediately just change our criteria so I've got was really hard because we knew we'd have to go get that repackage and get rid of that and get a new 10 million in you know otherwise we couldn't lend. That's just natural what you do you know and you know that's that's what's happening here I think.


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