Permanent ban on 100% mortgages (merged)

SGE1

Dooooooooooooooonut wrote: »

typical moronic labour proposal.

I see nothing good about this. Regulate the entire mortagae book of an institution by all means but a blanket ban is stick penic;s up nostril lunacy - let 0rivate instutions take risks if they like so long as there is no hazard ot the taxpayer. Also STOP BANNING THINGS YOU TROTSKYIST !!!!S.

P.S. WHO IS OFFERING 100% MORTGAGES ANYWAY!?

How can private institutions like retail banks take risks without hazard to the taxpayer? We've already seen that the Government will not let highstreet banks in the UK fail, so the taxpayer will always have to step in if banks don't balance their books properly. So the only option is to make banks balance their books, and if there's a cap on how much they can lend relative to house prices, then it makes it less likely that banks will get into trouble in the first place.

It also sends a clear message about the necessity of deposits, even small ones, thus instilling again a sense of personal responsibility to borrowing again.

Oh and I believe a couple of building societies were offering 100% mortgages to existing customers, do a search on the forum. Anyway, evidently you should have worked out that this move is to limit 100% mortgages cropping up in the future, not to deal with the current context.

And do you know who Trotsky was?

amcluesent wrote: »

Typical Clown/socialist interference with the market for an easy headline about yet another 'initiative'; just wait to see what blow-back there is from the law of unintended consequences.

Why don't they do something useful like abolish their hopeless HIPs. Oh wait, that brings in VAT and keeps council droobs in "work"!

If, by some chance, they really wanted to help the market then reform the nonsensical buying process.

:rotfl: And you propose to fix this situation without interference?

And what "unintended consequences" can you think of?

And how the bloody hell would abolishing HIPS make the blindest bit of difference?? I'm glad you're not in charge...

This is utterly typical of you two. You moan and moan and moan about people taking out massive LTV mortgages, branding them as irresponsible citizens who barely deserve the right to breathe, and when the very context you bemoan is legislated against, you... have another moan. Nice one.

vivatifosi

I agree, this is a good idea. It's strange isn't it? Since I've inadvertently found myself a part owner of a bank, I feel less inclined to loan money to people who will find it harder to pay back and less inclined to fuel future bubbles from which my bank may suffer.

ad44downey

A very sensible measure but they need to go much further. There should be a minimum 25% deposit requirement to get a mortgage and also and the outlawing of buy to let mortgages

MyLastFiver

Whoa there, people. All this will do is create another barrier to entry for ordinary people to get on the housing ladder. Mere mortals cannot save £25000+ to put down a deposit. Professional landlords can, though, and will be at a significant advantage in the market if this proposal is made law.

So once again - a piece of knee-jerk legislation subverts the original intention. There will be fewer houses bought to be lived in as homes, and more bought for profit.

Having a 100% mortgage is not necessarily irresponsible. I have a 110% mortgage. And I can afford it. Had I needed a large deposit, me and the wife would still be renting.

Graham_Devon

I don't think it's a good idea.

It is again, catering to those who can't look after themselves. Plenty of people did fine on 100% mortgages. For plenty it was the only way to secure a home.

SOME people used it foolishly. SOME people didnt research.

Now, were all being made to pay for it, as usual in this society of "we must all be the lowest common denominator".

100% mortgages didnt really cause the crash. Loads of other factors did. however, it's far easier for labour to point the finger at mortgages and stand there and say "this is prudence, I wish to blame everyone in the world except myself".

With other, proper procedures in place, such as "can this person really afford it", there is nothing wrong with 100% mortgages. When the other procedures are not in place (FSA responsible here)...they can be deadly.

Generali

The biggest flaw with this? Unsecured creditors can get a charge against a property in the case of default. So what do you do if you're an ambitious HBOS wannabe? You lend 95% (or whatever) secured and the rest unsecured.

If the debtor defaults, you get a charge against the property so you have a secured loan.

mewbie_2

It's yet another meaningless Brown soundbite. He has totally lost the aura of economic nous that people mistakenly gave him credit for while times were booming.

Generali

mewbie wrote: »

It's yet another meaningless Brown soundbite. He has totally lost the aura of economic nous that people mistakenly gave him credit for while times were booming.

Putting Labour in charge of the economy reminds me of that email that used to get sent a lot where the definition of hell was a place where the English were the chefs, the Italians the Policemen, the French the bureaucrats and so on.

Wookster

What a stupid suggestion - another senseless announcement of a "package of measures" intended to grab headlines but that won't make any difference what so ever.

It is highly hypocritical for Crash to talk about savings when he has destroyed any incentive to save and his latest "package of measures" will go some ways to actually destroying savings.

At this rate I almost feel there is no incentive to save & plan for the future, why not just be reckless and wait for a "package of measures" to come and bail you out.

lostinrates

geri1965 wrote: »

I think it's a stupid idea. I bought my house using 100% mortgage in 1997, I have never defaulted on any payments, nor do I have any other debts. The cost of the mortgage repayments was less than it would have been if I was renting in the same area.

As long as credit checks are done and the applicant is not in danger of overstretching themselves, I don't see why they shouldn't be lent 100%.

But you also wouldn't have defaulted had you saved first, surely?