Proposed mortgage cap 'suicidal' say 'property experts'

piggeh

I thought there was a theory that short sharp shocks are better than long slow slumps? How about if you say, let the market fall by 30% and then introduce 3x multipliers? Would you get the best of both worlds? How about if you introduced it during a period of high inflation as well (there would be a lot less NE then)?

I think it's the proverbial rock & hard place - do you place your trust in the FSA or the Banks?

piggeh

wolvoman wrote: »

All of this talk of income multiples is a bit pointless.

Before UK house prices even got anywhere near affordable for people with 3x salary and 10% deposits then foreign investors will already have snapped them up.

Or indeed foreign investors using mortgages at 4/5 x salary in their own countries.

I'm sure there's these factors as well - God forbid people buying UK property as holiday homes We wouldn't do it to anyone else..

But still, I guess it's a consideration, along with the effect on commercial property, which would come under different lending criteria.

lostinrates

Really2 wrote: »

So why do so many say they are priced out by couples?

What so men and women get the same wage and do exactly the same jobs.

I take it you are not in a relationship or know people on a differnet wage than yourself.

I wish my wife earned the same as me but unfortunatly life is a hell of a lot different to averages

Couples have an advantage in a key way. They were once single, and single plus single should equal a larger deposit pot with which to add to whatever mulitple. Couples without children, on average, I would have thought is a good position to be in because no outgoing on childcare and of course, safety in two jobs over one, but, this is not something most people are going to be able to prove at a bank or brokers, and is probably a minority?


As you say, life is not averages though. In our case I provided the lions share of our deposit, and now I have no income.

Really2

piggeh wrote: »

I think it's the proverbial rock & hard place - do you place your trust in the FSA or the Banks?

Banks.(I would not say trust but I bet they win)

Can anyone name another watchdog with any clout?

We are a capitalist county as long as risks are not excessive (95%+ mortgages and over 4X joint) I do not see what the problem is.

Even if you did this it just means the poorer still cant afford a house.

chewmylegoff

Really2 wrote: »

So why do so many say they are priced out by couples?

perhaps because they are, because the reality is that situation is not how you presented it - i.e. disparate income multiples favour single people.

What so men and women get the same wage and do exactly the same jobs.

maybe we're all being priced out by gay men in couples

I take it you are not in a relationship or know people on a differnet wage than yourself.

i am, and i do. things are different in different places. where i live most of the prospective FTBs are couples in their late 20s who both work in professional full time jobs. the likelyhood actually is that they will earn approximately the same at this stage in their lives. most of the couples i know are very close together in earning power. the situation is obviously different elsewhere, but so what?

I wish my wife earned the same as me but unfortunatly life is a hell of a lot different to averages

so you like numbers as long as they support what you are saying?

anyway - to the real point - again - the difference between the multiple a single can borrow and the multiple a couple can borrow is already in place and always has been, so what, exactly is going to change, apart from the maximum amount that can be borrowed? why are singles suddenly favoured by exactly the same policy which you suggest has up until now left them "priced out by couples".

chewmylegoff

wolvoman wrote: »

All of this talk of income multiples is a bit pointless.

Before UK house prices even got anywhere near affordable for people with 3x salary and 10% deposits then foreign investors will already have snapped them up.

Or indeed foreign investors using mortgages at 4/5 x salary in their own countries.

why would they buy anything in a pyramid which is not propped up at the bottom, and whose value will continue to fall until it is. it's not as if the last time that average property values fell below 3x earnings, all of the property in this country was bought up by rich foreigners.

Really2

lostinrates wrote: »

Couples have an advantage in a key way. They were once single, and single plus single should equal a larger deposit pot with which to add to whatever mulitple.

Which adds to my argument future HPI would be deposit lead rarther than mortgage.

Cash sloshing around always finds somewhere to go. I realy see 3X Salary is just delaying it for a few years and stoping the next generation.

That is why I think afordability is fair, it takes everything in to account, not just one size fits all.

Really2

chewmylegoff wrote: »

why would they buy anything in a pyramid which is not propped up at the bottom, and whose value will continue to fall until it is.

Surely if it was cheaper than renting it is going to attract investors?

lostinrates

Really2 wrote: »

Which adds to my argument future HPI would be deposit lead rarther than mortgage.

Cash sloshing around always finds somewhere to go. I realy see 3X Salary is just delaying it for a few years and stoping the next generation.

That is why I think afordability is fair, it takes everything in to account, not just one size fits all.

So savings lead rather than debt lead? Seems more sensible to me. I suppose the concern here is gifted deposits? Well, I suppose thats a case of c'est la vie, or inheritance planning for those who concern themselves with that. for the rest of us it would be a matter of prioritisation, like it is for most FTBs on this board.

BTW: I'm an affordabilty gal too, but I think a multiple is a good place to look at afordabilty from...some peope can afford less, some more.

chewmylegoff

Really2 wrote: »

Surely if it was cheaper than renting it is going to attract investors?

it's not really that simple is it. if it were, then every time renting is cheaper than buying there would be hordes of investors clamouring to buy. that doesn't happen, because the calculation is quite different for someone working out whether they should buy a house to live in rather than rent, than someone working out whether they should buy a house as an investment.