Demand for rented accomodation rises

ukcarper wrote: »

Nationwide no outgoings only loans entered one £200 a month loan still got 3.8x.

Fool I entered £1000 a month commitments and got a maximum of 3.1x joint with £600 I got 3.5x.

So around £110,000 maximum then?

That's cool. If someone can get lending multiples on joint income. Didn't work that way when I got my mortgage, and you could get pretty much anything you liked then.

However, we've pretty much cut what the average family, based on both working full time, and joint lending in half, in a matter of two pages.

We've gone from complaining abouit mortgage rationing to "wow, I can get 5x income".

We've gone from a completely unrealistic average household income, of 64k and more than halved it, to show true averages.

And we've come up with some sort of middle ground conclusion, which isn't anywhere near as great as it started out.

However, we still haven't even thought about children. Pesky little things, which will completely reduce the amount of debt you can get hold of for a mortgage. I would suggest this has a major significance to most of the population, and ignoring it on a forum to prove houses are affordable isn't all that helpful.

However, theres no need to go any further. Even with the very best scenario of a dual income, both average earning, childless household, were now down to a 1 bed flat in terms of affordability. I need say no more.

Graham_Devon wrote: »

So around £110,000 maximum then?

That's cool. If someone can get lending multiples on joint income. Didn't work that way when I got my mortgage, and you could get pretty much anything you liked then.

However, we've pretty much cut what the average family, based on both working full time, and joint lending in half, in a matter of two pages.

We've gone from complaining abouit mortgage rationing to "wow, I can get 5x income".

We've gone from a completely unrealistic average household income, of 64k and more than halved it, to show true averages.

And we've come up with some sort of middle ground conclusion, which isn't anywhere near as great as it started out.

However, we still haven't even thought about children. Pesky little things, which will completely reduce the amount of debt you can get hold of for a mortgage. I would suggest this has a major significance to most of the population, and ignoring it on a forum to prove houses are affordable isn't all that helpful.

However, theres no need to go any further. Even with the very best scenario of a dual income, both average earning, childless household, were now down to a 1 bed flat in terms of affordability. I need say no more.

It is not based on average earnings but people on the lowest 10%.

geneer wrote: »

You do see where I'm going with this Hamish, right?

Another mindless trolling mission doomed to failure?

My point was pretty clear geneer, even for you to understand.

Which is that the average multiple even at peak never crossed 3.5 times income. Therefore the vast majority of actual borrowers did not overstretch themselves.

"Irresponsible lending" certainly happened in isolation, and I suspect always has done.

But it was nowhere near as widespread as you like to claim, nor responsible for very much of the gains in house prices.

After all, here we are with lending at a third the level of 2007, where lending standards have tightened to a piint far stricted than was the case in the 1960's, 1970's, 1980's, 1990's and 2000,s, yet house prices remain just 10% or so below peak. Even if it was 20%, it completely blows your theory of a credit fueled boom out of the water.

HAMISH_MCTAVISH wrote: »

Another mindless trolling mission doomed to failure?

My point was pretty clear geneer, even for you to understand.

Which is that the average multiple even at peak never crossed 3.5 times income. Therefore the vast majority of actual borrowers did not overstretch themselves.

"Irresponsible lending" certainly happened in isolation, and I suspect always has done.

But it was nowhere near as widespread as you like to claim, nor responsible for very much of the gains in house prices.

After all, here we are with lending at a third the level of 2007, where lending standards have tightened to a piint far stricted than was the case in the 1960's, 1970's, 1980's, 1990's and 2000,s, yet house prices remain just 10% or so below peak. Even if it was 20%, it completely blows your theory of a credit fueled boom out of the water.

Funny how completely undermining your BS is always trolling Hamish. :rotfl:

I'll say it again, comparing "average" household lending multiples is meaningless, as no distinction is made as to whether these are single or double incomes.

3.5Xsingle income is what has been considered the benchmark of responsible lending.

When we compared the CML average FTB multiples to average salary vs average house prices there was in fact a clear correlation.

It is also clear that the CML average multiples were significantly higher in 2007 than the last crash, suggesting that irresponsible lending was indeed a significant aspect of the recent crash.

Further evidence, provided by your good self, demonstrates that 5xsingle salary was readily avaliable during the last bubble.

So its quite clear that
1) risk lending (unsurprisingly) played a part in the 90's house price crash.
2) the lending multiples prior to the recent crash were even higher, and likely even riskier.

Given the state of the financial systems and global economy, that of course should be self evidence to most reasonable people.

You are not of course reasonable.

In any event, let us not forget that as I have demonstrated a clear corellation between average salaries and CML lending multiples, the ration of average salary to average house price does become a useful market indicator.


Whilst your own key claim, that the CML ration of income to cost demonstrates that responsible lending is the norm is clearly poppycock.