Ilse Evans Says Borrowers Being Locked Out of the Market
Harcourts’ Ilse Evans says the CCFC amendment of December 1st needs changing, as borrowers are being locked out of the market. Each month mortgage advisers around the country are invited to give insights into developments in the residential real estate market from their unique perspective, and their latest survey undertaken last week shows weak results again across all measures.
A net 52% of the 69 mortgage advisors responding said that they are seeing fewer first home buyers coming forward for finance. A net 57% are seeing fewer investors, and a net 83% report that banks have reduced their willingness to lend.
The strong preference of borrowers remains for the two and three year fixed rate terms, and more or less first home buyers looking for mortgage advice.
A net 52% of mortgage advisors responding in the first survey for 2022 have reported that they are seeing fewer first home buyers coming forward for a mortgage. This is an improvement from a net 75% seeing fewer in December, but continues to indicate extra backing away by first time buyers.
Advisors strongly noted the impact of changes to the Credit Contracts and Consumer Finance Act effective from December 1st as making mortgage acquisition extremely difficult for first home buyers. The reduction in the proportion of bank lending able to be undertaken where the borrower has less than a 20% deposit was also frequently cited.
Some of their comments include the following.
The recent changes to the CCCFA are having the biggest impact compared with LVR restrictions, interest deductibility removal etc. Banks are now taking a forensic look at client’s expenses; trust has been eroded between the bank and client around how they should live their lives.
First home buyers with less than 20% deposit are virtually cut out, unless they have a live deal and that’s quite scary for them. Most banks are not lending at all to people with less than a 20% deposit. They must be no less than 6 months with one employer as long as the occupation is the same, or 12 months with one employer if new occupation. Must have employer letter, payslips and 12 month IRD earnings for income verification.
With Ilse’s information at hand, please take a moment to find out more about property appraisals Takapuna and selling my house Takapuna by visiting the website at http://www.ilseevans.co.nz .