Sensible measures to improve the house market

MissMoneypenny

!!!!!!? wrote: »

* Introduce 'non recourse' laws for new mortgages where handing back the house cancels the debt (to cut out silly lending). Would also protect house buyers who know that they can just give the house back if the worst comes to the worst.

No to this one. People should be responsible for their own debts. If they know they can just keep walking away from their debts, then they will just continue be a burden to the responsible people.

I would like to see the law changed so that people can't just runaway and hide from their debts and then claim statute barred, as the lender couldn't find them during the time frame required. Bad behaviour should never be rewarded IMO. If a debtor has continually told their lender where they are and the lender has run out of time, then then it should be statute barred.

lonestar1

Make stamp duty only applicable to none primary residences and set it at 20%
Raise deposit needed to 25% drop loan multiple to 3x's salary
Ban all incentives like 5% deposit paid etc Shared Ownership etc

Incisor

!!!!!!? wrote: »

Forget Brown's likely desperate attempts to throw taxpayer money to reignite the burst housing bubble. What sort of measures would you implement to make a stronger, more resilient housing market in the future and make sure this doesn't happen again?

My addition: Security on loans to be good for only 98% of the amount lent, but defaults to be recorded by credit referencing agencies. Reasoning: Silly lending has caused this crisis, and the banks know that they can lend foolishly and just take the house back. Foolish lending needs to hurt foolish lenders.

penguine

Maybe houses need to come with a disclaimer like stocks and shares: "The value of your investment can go down as well as up."

Oh, and compulsory education in school on how to manage money and make well-informed financial decisions.

Max_Headroom_3

How about a law whereby banks can only lend money that they actually have?

Do away with Fractional reserves and Interbank lending (why doesn't the customer just go to the bank with the money, rather than borrowing from Bank A money leant to it by Bank .

And do away with selling debt on (a lot of the ridiculous lending was on the back of simply selling dodgy loans right out so unconcerned with taking on risk).

If banks could only play with their own money they'd be keener to get it in (better savings rates) and much more careful giving it out.

sdooley

You seemed to have missed out:

Provide a reasonable supply of high quality, well maintained social housing which won't immediately be withdrawn from the market by right to buy.

justpurchased

!!!!!!? wrote: »

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* Mandatatory 3.5x single/2.5x joint salary limit on borrowing.

I do not get this thinking why is it you should you have a higher multiple if single? If a single person becomes unemployed who pays the mortgage?
It is cheaper to live as a couple than when you are single also (sharing utility bills etc). So surely if you were a bank it would be safer the other way round.

sdooley

It is statistically more likely that one of two people will lose their job than one single person. 2.5 times joint salary is 5 times a single salary.

Plus with two people borrowing, the traditional situation is that one of them will stop working at periods for, among other things, confinement and child-rearing.

justpurchased

sdooley wrote: »

It is statistically more likely that one of two people will lose their job than one single person. 2.5 times joint salary is 5 times a single salary.

Plus with two people borrowing, the traditional situation is that one of them will stop working at periods for, among other things, confinement and child-rearing.

So are a couple both more liklely to lose there job than a single person, Sorry I do not see that, as they still have a wage coming in. unlike a single person.
2.5X joint is not 5X single as one person will always earn less than the other also, so what ave single people got better rights?
So single people do not have children and don't go to jail? I think you have highlighted the risks of lending to single people greater as either of these situations would stop the loan being repaid.

WTF?_2

justpurchased wrote: »

So are a couple both more liklely to lose there job than a single person, Sorry I do not see that, as they still have a wage coming in. unlike a single person.
2.5X joint is not 5X single as one person will always earn less than the other also, so what ave single people got better rights?
So single people do not have children and don't go to jail? I think you have highlighted the risks of lending to single people greater as either of these situatuins would stop the loan being repaid.

Yes - but even they still have some wage coming in, it won't be enough to easily meet the mortgage payments. That's why the multiple is lower.

eg Person A Earns 25k , Person B earns 15k

That's 40k combined.

If the bank loaned 3.5x 40k and person A lost their job, that's a problem. Even if it was only person B, still a problem.