Petem95

Plan to cap mortgages at three times income | This is Money

We should have had this done years ago - this will prevent another crazy house price boom in future!

All we need now is a clampdown on buy-to-let, which I'm sure will follow in the future.

Houses won't be looked at like easy-money investments then, which is how it should be really (I'm sure even people who currently have homes as investments would actually agree on that)

Removed.

The average house price here is over £300,000, so that means the average couple will have to earn £100,000, not likely really unless you're both well paid finance industry types. What about mechanics, shop workers, builders, sparkies etc.

hodgy0_2

as said in previous post -- the politics of the "lowest common denominator"

just coz some idiots get themselves into financial trouble, we all get refuesed access to capital by a blanket ban -- rubbish

Jamie

Lewis will be here soon to tell you all about it

unclebuck

Well, it hasn't happened yet, but if it does it will be yet another disaster for the economy.

For example - somebody who bought near the top of the market with a fixed rate @ say 6 x salary has to re-mortgage after a certain period but will only be able to get 3 x salary mortgage. How's that going to work?

Overall house values will have to fall massively for people to even be able to get on the ladder thus leaving millions of owners in negative equity. How's that going to work?

Jamie

Rent a house ?

XRS

Agree it should have happened years ago. A house is just somewhere to live. Agreed this could soften the demand for mortgagesand houses, but many lenders are operating at or below this level already.
I also think there should be some thought given to having a special (probably higher) interest rate for mortgages - a ballooning housing market does no good to the economy, it just diverts investment away from wealth-creating industry.

DYK

I heard that Caravans and mobile homes are quite comfy to live in nowadays,I have always wanted to try living on a boat/yacht.

SlimJ_2005

Agree, if you can't afford to buy, don't buy, rent. If you don't like it, get a better job (hard at the current time I know).

Jamie

Slim i don't think anyone is buying houses unless they are very very high up on that ladder.


Saying that a good mate of mine lives on a barge and has all mod cons plus fek knows how many ££££ drives a nice merc

FlightMan

The disaster was allowing house prices to rise to such ridiculous levels, with people were taking out 5/6x salary mortgages to buy them.

How do you think FTB's will view this? A disaster or an opportunity to buy a house without becoming slaves to a lifetime of debt?

As for NE, we had that in the early 90's. As far as I know prices eventually recovered. They will again.

Of course it could also be that the Govt plan on printing so much money, the average wage could soon be £50k?

Jamie

It was 92 mr flightman and yes they will recover within five years time.

s70rjw

iTrader: (2)

22 years ago, when I took on my first mortgage, The max I could borrow was 3.5 times my salary. For most it was 3 times. It ensures you live within your means............

SunnySideUp

Been there, done that ..... many hours previously

https://www.scoobynet.com/non-scooby...-tomorrow.html

Only some numpties claim that my version is trolling

unclebuck

That's because 'your version' is trolling.

This is a sensible thread without the subtext, so be a good chap and stop trolling on this one.

fatherpierre

What banks were actually dishing out 5/6x joint salaries at the height of the silliness?

When I got a mortgage (2006) I could only get 3x joint with the bread knife.

DYK

Think it's more to do with self responsability which is something that as been lost.If i had to borrow 6x my salary to buy a house then in my own mind i would know it something i can't afford if i have to borrow so much,so i rent or live in a caravan or something.But some people are just so desperate to have a house they will go to any lengths to get it,i would not encourage such high prices on property by getting into debt for some bricks and mortar.If you can't offer me a fair honest deal then can shove it up their *** and ill keep my money and spend it abroad,or buy one of them £15000 log cabins from Argos with a bit of shagpile

jjones

why?

cookstar

iTrader: (6)

And why is that then?

FlightMan

Because people buying BTL properties as INVESTMENTS on dodgy interest only mortgages do two things.

Drive up the cost of property.
Price FTB's out of a HOME.

As a BTL investor yourself, I'm sure you'll disagree.

cookstar

iTrader: (6)

None of my properties have or will have a "dodgy" interest only mortgage on them.

rossyboy

iTrader: (8)

because giving mortgages on a BTL to just about anyone was one of the main factors that led to the stupid bubble in the first place. FTBs having to compete with ever increasing would be landlords, making hay on the unsustainable rising prices.

The ability to own BTLs should really only be allowed to the priviliged few (I'm not one of them) or commercial outfits with the ability to pay e.g. 50-75% cash for them. That would free up more for the FTBs and get things moving again.

To be honest, they already have cracked down on mortgages for BTLs. Just try doing a search and see what levels of deposit are required!

davegtt

How does that effect someone who say, has a 120k mortgage but only earn, say 30k a year. When their current deal runs out does that mean because theyre unable to remortgage on a new deal theyre stuck with their current lender on the variable rate?

Cant see a good way of implementing this unless its restricted to FTB'ers?

SunnySideUp

That's exactly what it means ..... the idea is that they will 'save' the difference and then be able to afford more/re-mortgage.

cookstar

iTrader: (6)

25-30% deposits required?

As it should be.

MikeCardiff

iTrader: (2)

Have to say I agree with this, although it should never have got to the point where lenders were giving out 5x or more in the first place ( same with interest only mortgages for FTB's - how many actually took out some sort of endowment as well to cover the capital which was the whole idea behind interest only ? very few I'd guess - most were hoping the property would go up in value to cover it ! )

For couples where both are working, then it wont be that much of a stretch to buy somewhere ( assume £40K joint income, which isn't huge, probably being loaned 3.5x, plus having to come up with a decent deposit, then national average (( £180K ish ??? ) houses are within reach. If house prices drop by a fair amount, then it will be even more affordable - in fact, it will end up going back to roughly how the situation was before everything got out of hand.

What it will do is stop single people buying anything other than cheap flats or small starter homes, which is what used to happen 10 years ago.

I remember my dad telling me when he bought his first place ( in the 70's ) that 3x was all he could get AND there was a 6 month waiting list for the mortgage, and the lenders were VERY picky about who they gave money to and making sure they could afford to pay it back.

FlightMan

My sister in law is an example of this. IO mortgage with NR, at 0.5% above base rate. Then she moved to Oz and is now letting it out ( hasn't told NR of course ) and is crowing abut her cheap her mortgage is.

Of course she's about 30k in NE, but I don't want to rain on her parade.

David Lock

A bit naive some of these comments IMHO.

So much depends on bank rates. 4 x salary at 3-5% base rate is probably manageable but if base rate hits 15%, which I remember it doing, then you may be in the ****.

And once the current mess is over presumably one can go to a bank in the EC and get a Euro mortgage and probably pay extra to protect currency drop in the long term, or take a chance?

And I expect more banks will be offering cheaper 40 year mortgages or offering deals where parent's house will be used to release capital for an offspring's deposit (on a roll-up equity release basis).

The number 1 rule is "The banks are there to screw you".

Or of course the govt of the day could allow new builds on selected green field sites so cost would better reflect actual building cost rather than 60% of cost because of posh location.

dl

MrRA

f1_fan

iTrader: (9)

The irony is of course that your repeated posting on SSU's threads/posts is in itself trolling. If you have a legitimate complaint about SSU use the RTM button and if you get no joy take the hint old chap