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

Graham_Devon

chucky wrote: »

so if i have £400k in cash and a salary of only £40k i can only buy a property 3 times my salary. that £400k is certainly more than a 5% deposit.

some people really do live in a fantasy world

Absolutely of course not.

You'd be "able" to buy a property worth £520,000 if you wished to. Talk about going off on a tangent

chucky

Graham_Devon wrote: »

Absolutely of course not.

You'd be "able" to buy a property worth £520,000 if you wished to. Talk about going off on a tangent

maybe look at it from another angle Mr Devon - in Year 20 or even Year 10 of my mortgage I/you will be earning much more than Year 1 of my mortgage. 3 times salary is way too restrictive for most of the population, affordability is the key factor for a mortgage not a salary multiplier.

generally the only people that want a 3 times salary mortgage are the people that can't afford to buy a property now.

mbga9pgf

chucky wrote: »

maybe look at it from another angle Mr Devon - in Year 20 or even Year 10 of my mortgage I will be earning much more than Year 1 of my mortgage. 3 times salary is way too restrictive for most of the population, affordability is the key factor for a mortgage not a salary multiplier.

generally the only people that want a 3 times salary mortgage are the people that can't afford to buy a property now.

What happens if we get 10 years of deflation in your scenario there then? Look, this is about long term stability! What is your problem wit that? Or are you a Lazy property owner that wants me to fund your retirement via bricks and mortar?

chucky

mbga9pgf wrote: »

What happens if we get 10 years of deflation in your scenario there then? Look, this is about long term stability! What is your problem wit that? Or are you a Lazy property owner that wants me to fund your retirement via bricks and mortar?

Long term stability is not in a politicians mind

Me lazy - nah. i have a diversified portfolio of tax efficient investment vehicles across asset classes that will provide me with a good retirement thank you.

yeah you win - your "what if" argument wins it hands down

piggeh

Banks are not altruistic/socially responsible, if they have covered the risk through larger deposits then they are highly likely to increase lending to an individual past established ratios, to them they take the 'risk' that this person can financially stretch themselves a bit thinner than most and the bank will benefit.

mbga9pgf

Thing is, how many whopping deposits do we have now asset values have collapsed? We get a lot of frugal people on here, but may I suggest for one minute that is not the norm. Average salary at my work is around 40K, I can think of 3 others that have more than 10K in their bank accounts, as the rest of it has gone on cars, holidays etc.

A lot of them are also in Negative equity or at least rapidly approaching it....

Graham_Devon

chucky wrote: »

maybe look at it from another angle Mr Devon - in Year 20 or even Year 10 of my mortgage I/you will be earning much more than Year 1 of my mortgage. 3 times salary is way too restrictive for most of the population, affordability is the key factor for a mortgage not a salary multiplier.

generally the only people that want a 3 times salary mortgage are the people that can't afford to buy a property now.

It's only too restrictive because of high prices.

Look at it this way, in 10 years, you will be able to upgrade to another house if you wish, with your higher wages and smaller mortgage payments. Or pay off your mortgage and live mortgage free. Or you know, actually enjoy life instead of being a slave to house prices.

Doesnt matter about the future. Its NOW that matters.

pandamonia

what you bulls dont understand is the FSA are on a war path and the government want regulation to stop this mess happening again. limiting lending to 3x salary will be the best thing to happen for future generations. cheaper homes and more money slushing around the economy rather than paying off debts such as mortgages.

as far as im aware this doesnt need to be sworn is as law and neither does it matter which government party is in power. this is a decision by the FSA and they can pretty much regulate how they see fit and their powers will be increased in the future to stop this crisis happening again.

i hope that lending is limited to 3-3.5x salary as i dont want to have to pay alot for a home :P

Dan:_4

The traditional income mutiple of 3x your salary is history and will stay that way, despite the paragraph you've read in today's Telegraph.

There are many more factors that need to be taken into consideration then just salary - such as your credit record, number of children, employment history, more then 1 income etc. You would also be a less risky customer if you had a large depoist, or choose a long term fixed rate.

Your 'ability to pay' is key, and fairer then a simple 3 x your salary.

mbga9pgf

Dan: wrote: »

Your 'ability to pay' is key, and fairer then a simple 3 x your salary.

So what do you suggest they regulate then? Because as we have seen, extra regulation is required.

Otherwise, we wouldn't have a hideous housing bubble, enormous personal debt and rocketing repossessions.