3.5

macaque_2

For those of you waiting for a bounce in house market, I suggest you put the new car brochures in the bin immediately.

The FSA are going to link mortgage offers to income. One suspects the figure will be in the range of 3.5 to 4.0 X income. House prices are going to have to drop a long way to get back into this zone (incomes are also falling).

and far stricter rules on the types and size of mortgages and loans which can be provided

http://financialadvice.co.uk/news/7/mortgages/9821/FSA-set-to-tighten-UK-mortgage-lending-rules.html

In his 1997 Budget speech, Gordon Brown said, “I will not allow house prices to get out of control and put at risk the sustainability of the future”. The lending rules being proposed by the FSA are the obvious way of controlling speculation. So if Gordon knew it had to be done and how to do it, why did he do nothing? Are modern politicians so devoid of concern for the common good that they are prepared to destroy the country for a few more years in office?

1echidna

At the the same time he is talking about boosting the housing market with various measures. He is double talking brown stuff.

PasturesNew

There's only ONE way round this ... more shared equity

Kez100

I can see them doing that! You can only borrow 4x max but you can top up with Government/Council shared equity.

The Govt desperately want the market moving (good for jobs across the sector) and at the highest possible value (good for bank balance sheets which we now own).

VfM4meplse

macaque wrote: »

For those of you waiting for a bounce in house market, I suggest you put the new car brochures in the bin immediately.

The FSA are going to link mortgage offers to income. One suspects the figure will be in the range of 3.5 to 4.0 X income. House prices are going to have to drop a long way to get back into this zone (incomes are also falling).

This is less likely to affect those who have paid off a chunk off equity and are looking for their next home than the FTB. If there's stasis at the bottom of the market that's bad news for all.

lilac_lady

Borrowing for a mortgage used to be limited to ACTUAL annual salaries - not Jackanory ones. House prices need to come down so that houses are affordable to ordinary people.

macaque_2

VfM4meplse wrote: »

This is less likely to affect those who have paid off a chunk off equity and are looking for their next home than the FTB. If there's stasis at the bottom of the market that's bad news for all.

A stasis at the bottom of the market is exactly what we do want. Writing a book or building a car is a wealth creating process. Buying a bigger house is not (even if the buyer aquires increased wealth through speculation). The economy has to break itself of this addition to property trading. If not, the country will keep getting poorer.

ad9898_3

This would be great news, pity it wasn't implemented before now, if they manage to pull it off, the housing market would start moving again within a couple of years as sellers have no choice but to reduce, instead of thinking 'I'll hang on until things get back to normal', i.e 2007 prices, and dragging this sorry state of affairs on for a decade, as is normally the case.

VfM4meplse

macaque wrote: »

A stasis at the bottom of the market is exactly what we do want. Writing a book or building a car is a wealth creating process. Buying a bigger house is not (even if the buyer aquires increased wealth through speculation). The economy has to break itself of this addition to property trading. If not, the country will keep getting poorer.

Aren't you assuming that people only buy more expensive homes as an income generator rather than actual need? Everyone needs a roof over their heads; capital gains are only realised through additional homes. If there are no FTBs those who can potentially afford to move won't be able to if they can't sell their own properties.

1echidna

ad9898 wrote: »

This would be great news, pity it wasn't implemented before now, if they manage to pull it off, the housing market would start moving again within a couple of years as sellers have no choice but to reduce, instead of thinking 'I'll hang on until things get back to normal', i.e 2007 prices, and dragging this sorry state of affairs on for a decade, as is normally the case.

Nothing wrong with a falling market. My wife and I plan to sell, live with a relative whilst we take our time on a falling market, to find a new place nearer my dughter and buy putting some additional equity in. It has to be remembered that the true price is what you get on the market be it rising or falling. We could do without the emotional baggage of unrealistic buyers or sellers being a problem.

besonders1

I am in favour for cheaper housing for everyone both homeowners and FTBs. I suppose regardless of everyones opinions all sellers are at the mercy of the falling market.