House prices down to at least 115K... Thans FSA! 3X here we come!

funkyfreddy9k

Really2 wrote: »

I disagree when I purchased my first house in 2001 the house was 5% deposit and less than 3X single wage.

In most areas I think that will get you on the ladder at least now.

it is just historicaly expensive areas it could prove a stumbling block but I guess those areas are more afluent so a larger deposit would not be a problem.

What percentage of the population are on less than average wage though?

3x minimum wage (say somewhere around 12000) = a looooong way off buying a house in even the lowest priced areas.

Even on 25k giving 75k I think you'd struggle.

mbga9pgf

How about we just get back to normal house prices and eveyone can be happier and we dont have to have these arguments. Because face it, if this comes in, house prices will collapse to the levels I have argued, they have to.

piggeh

Really2 wrote: »

I disagree when I purchased my first house in 2001 the house was 5% deposit and less than 3X single wage.

In most areas I think that will get you on the ladder at least now.

So median wage around £20k + 5% deposit of £3k = £63k. What sort of property would that buy someone? In the SE I guess all FTBs would be restricted to houseboats or homes on trailer parks.

Really2

Is it Really my fault I don't live in the centre of london?

I would surgest the average wage in SE1 was above the UK.

Some areas have more to fall than others. I thought most people expected that anyway.

GDB2222

Really2 wrote: »

Ok you seem to making 1+1 and making 20

It is saying the lower the deposit the lower the multiple

5% = 3X (if it ever happens)

Anything else would be considered for more, sorry that is just pre-04 mortgage market.

This is what the paper says:

In all but the most exceptional circumstances, it will become "normal practice" again for loans to limited to a maximum of three times the borrower's salary.

Now the Telegraph may be completely wrong, and the FSA may not mean that at all. I have no idea. But it is quite clear what it says, ie that 3x salary would be the norm for all mortgages, apart from 'exceptional circumstances'.

It says separately that the min deposit will be 5%.

Really2

GDB2222 wrote: »

This is what the paper says:



Now the Telegraph may be completely wrong, and the FSA may not mean that at all. I have no idea. But it is quite clear what it says, ie that 3x salary would be the norm for all mortgages, apart from 'exceptional circumstances'.

It says separately that the min deposit will be 5%.

"As part of a wide-ranging package of announcements for banking regulation following the near-collapse of the financial system, Lord Turner, chairman of the Financial Services Authority, will also declare a ban on 100 per cent mortgages.In all but the most exceptional circumstances, it will become "normal practice" again for loans to limited to a maximum of three times the borrower's salary.
And as part of their deal, prospective home owners will have to provide a deposit of at least 5 per cent ."

That sounds like a FTB mortgage to me, also they are talking about never having 100% mortgages again.

I think this is clearly FTB mortgages but I think you can read in to it what you want.

The only proof Will be if it ever happens.

I think FTB possible 3.5X+1 partner and 5%

20% + Deposit up to 4X joint. (if they have impeccable credit history)

these were pretty similar to pre 2004 but it seems most on here have forgotten.

Paul_N_4

In all but the most exceptional circumstances, it will become "normal practice" again for loans to limited to a maximum of three times the borrower's salary.

And as part of their deal, prospective home owners will have to provide a deposit of at least 5 per cent - with many banks and building societies expected to ask for even larger amounts.

Sounds like high rates for those with only 5%, if they can find a lender willing to lend with only 5% deposit.

So FTBer on £20000 can borrow £60000. Add 10% deposit for £66000 subtract fees, etc. That will buy nothing....(yet).

FTBer on £30000 (above average wage) can borrow £90000, so £100000 with 10% deposit. Lucky to afford a pokey flat at today's prices.

I genuinely feel for those people sucked into buying into the property ladder over the past few years. I'd be gutted personally. Regardless of some of the "its nothing news" comments on here (I own property by the way), this is BIG NEWS and the final nail in the coffin for HPI, period. This is the sort of news the HPC bridgade have been waiting for. If this comes into effect (which looks pretty likely by the Telegraph article), I don't see a recovery for property in the next decade, and prices a lot further to fall.

Remember, this is capping multiples. Mortgage rates could be at 1%, but still you're looking for average FTBer on say £20000 completely priced out the market at today's prices.

I suspect many BSs and banks are already lending close to these figures anyway, which is why mortgage approvals are down by half, and house prices therefore falling. But I was expecting a recovery once these low rates filter through, and the money starts flowing again. But with a cap on lending multiples, that just isn't going to happen now.

One would have to question the political motive behind this. It seems to fly in the face of what the current PM wants. Are the FSA looking beyond Labour?

mbga9pgf

Really, A ftb doesnt have to get a FTB product though. so what you have typed above is pointless. Which is why I think its rubbish. I am a FTB. I have 30-40% deposit. I think it would be fundamentally wrong for me to be able to go out and get above 3X salary mortgage if that is what everyone else is limited to.

One would have to question the political motive behind this. It seems to fly in the face of what the current PM wants. Are the FSA looking beyond Labour?

I think its more like Labour looking beyond the next election. They need to be seen to be creating measures that will stabilise the market for the LONG term.

The fact theat Cameron has said he will get rid of the FSA and strengthen the powers of the BOE WHEN they get in has also probably focussed the resolve of Hector Sants who needs to prove his virility as a market regulator. Not before time.

I think Gordon knows his chances at the next election are next to none; he is doing it for the party, comrade.

As an aside, any word on what Noo Labours coffers are looking like? Last time I heard (pre-credit crunch?) they were in deep !!!!!! with lots of debt...

Really2

mbga9pgf wrote: »

A ftb doesnt have to get a FTB product though. so what you have typed above is pointless. Which is why I think its rubbish.

They would with a 5% deposit.:rolleyes:

I clearly wrote about larger deposits or do you not except that.

do you have problems with being polite?

Then edit it after I wrote this.:rolleyes:

mbga9pgf

Why should someone with a bigger deposit be entitled to a bigger multiple? It doesnt make any sense! It doesnt exactly make their bigger mortgage payments more affordable does it?