Permanent ban on 100% mortgages (merged)

piggeh

Cleaver wrote: »

Just wondering if anyone's seen this story yet:

http://news.bbc.co.uk/1/hi/uk/7903985.stm

It's about Brown wanting to stop 100% mortgages. Pretty damn sure it hasn't been posted anywhere on this site yet.

That article isn't about mortgages
Brown: Banks should be 'servants'

is what the title says. It hasn't been discussed on here yet though.

Cleaver

piggeh wrote: »

That article isn't about mortgages
Brown: Banks should be 'servants'

is what the title says. It hasn't been discussed on here yet though.

I give up.

Tim_Nicholas

I still think the man is a co*k

Cleaver

Just a quick post to let SGE1, mewbie and Dooooooooooooooooooonut know that I've gone through the thread and thanked all their knob gags. Something this forum needs more of I think.

leveller2911

Cleaver wrote: »

Just a quick post to let SGE1, mewbie and Dooooooooooooooooooonut know that I've gone through the thread and thanked all their knob gags. Something this forum needs more of I think.

"my turnip looks like a thingy, which is strange as my thingy looks like a turnip"



You can't beat a good ol fashioned knob gag.

luckyrunsofar

My path to being a homeowner seems almost comical now.

Turn up at HSBC after graduating in 2006 at 21 years old. No payslips, just a contract saying I was starting at a company in the next few months. No deposit. 150k, 100% mortgage for BoE+0.79, thank you very much...(based on the offers of work for 35k and 21k for my partner).

Feb 2008, remortgage FEE FREE with a 5% deposit at BoE + 0.09%.

Talk about good timing...

So the point is, 100% mortages arent the problem, it just needs tighter controls (really I should never have got the mortgage). Banks are entitled to take risks in order to try and make a higher return, like any other individual.. assuming they have a well balanced book.

lethal0r

Cleaver wrote: »

It's weird isn't it? It's very strange that one of his advising team doesn't come up with a plan around him getting on TV and saying, "You know what, we stuffed up on a few things. Sorry about that. However, this is our plan to get out of it". I'm paraphrasing there, but you know what I mean. I guess they think they'd lose votes, but I really don't think this would be the case.

I guess that's modern politics for you - trying to appeal to everyone and appear as a force that is never wrong on anything.

yes I would warm to any politician who admitted to their mistakes and answered questions openly, even if they changed their mind later or were proved wrong. thats normal for that to happen!!

i watched a program about spitting image a bit ago and the show creators/writers were saying there are far fewer characters in politics now, which i think is very true. they all seem so similar, say similar things, have similar policies, why vote for one over another? nobody stands out.

Graham_Devon

MrDT wrote: »

Time for me to drag out the old bull adage of "I'll buy two then".

I'm not a bull. I am a bear. Dropping prices will benefit me greatly, and I very much expect them to drop. I still can't see the nationwide average dropping that far though. No amount of wishful thinking can swing it.

A 70k house, a 7k deposit, a couple earning modest wages say £35k gross (20k+15k) between them. Looking to borrow 63k, less than 2x joint income. You expect the nationwide average to go that low? Less than 2x joint salary? That's not reversion to trend, that's a huge undershoot.

Women tend to work nowadays. They won't have been when looking at your long term averages. We won't be heading back to stay at home wifeys being the norm anytime soon. Consider average household income when analysing historical data, not average main wage earners salary.

Although increased unemployment is doing it's bit to reduce average household income, even 10-20% unemployment wouldn't have as much of an effect as 50% of all couples opting to stay at home and play house.

I think your 3.5x single low income expectation for average family homes to be real wishful thinking.

I would buy two.

And a load of people with debt.

And a load of people who need to move because of family issues, marriage breakups etc, who owe thousands in negative equity.

Not everyone is sitting in rented accomodation with a deposit, ready to pounce on 35k between them. We will have a massive amount of people with huge negative equity debts to pay off, because people will NEED to move.

Add these people into the equation, and it all starts to go downhill.

This is something I often see an oversight on, everyone seems to be relying on people being ready to pounce and loads of people ready to buy. In reality, it's just not like that. Sure, the next house may be a shed load cheaper than the one you got, but if your in 50k neg equity, and have 20k saved as a deposit, your still 30k down.

mbga9pgf

luckyrunsofar wrote: »

So the point is, 100% mortages arent the problem, it just needs tighter controls (really I should never have got the mortgage). Banks are entitled to take risks in order to try and make a higher return, like any other individual.. assuming they have a well balanced book.

The point of all of this is not to prevent the banks taking risks again, the point of this is to ensure the housing market does not go into a hyper bubble again. It becomes very difficult for house prices to decouple from wages when limitations start to be placed upon maximum loans to value and minimum deposit requirements.

The first of those you say is not yet regulated. Just wait. Once the government owned banks get massively hit by UK subprime writedowns, it will follow. Thank god. No-one should be allowed to borrow more than 4 times income, period. This includes unsecured lending. So, if you have 20K on the plastic, this will reduce what you can borrow by 20K on your mortgage.

If they do this, the 2007 peak will be the last time we have to see a generation priced out of home ownership and others massively hurt by falling equity values.

Lets face it, those that intentionally set out to make massive profit from property as a result of capital appreciation above inflation are whole bred scum anyway.

Capital increase tax on second home ownership should be taxed at 100% anyway.

That wil put paid to Brown and similar politicians claiming no more boom and bust on the back of out of control house prices. If Brown corrects the wrong he knows that he has done, I will take my hat off to him.

The_White_Horse

bad idea.

stop interfering!!! if banks want to lend 100% then that is up to them.

liberal lefties, want to interfere in every part of peoples lives and businesses.

if people default, they lose their home. if the home doesn't cover the loan, then the bank loses. the end.

that is how it works.