Proposed mortgage cap 'suicidal' say 'property experts'

edgex

why are people comparing what they would get as a 3x mortgage to what property prices have been & are?

one of the reasons prices have got so out of hand is because buyers were able to get 4/5/6x mortgages, >90% LTV etc


also, less risk does not mean you can lend more:
the risk is based on what they reasonably expect to be able to sell the property for if they needed to reposess.

if the bank has a property valued at £100k, & they are willing to lend £90k, it dosnt matter if you have a £50k deposit, they wont lend you any more than the £90k.


Disposable income:
could it be that those people currently in the market with large deposits have actually spent some time saving up, & not buying every new shiny thing that comes along.
or they could have inherited some money, or had a few good bonuses etc etc
I dont think theres any connection between income & deposit.

chucky

people coming out of a Fixed rate on a high salary multiple and remortgaging would find it impossible to get a new mortgage deal.

how do you calculate BTL's for example.

this regulation is just blue sky thinking - if it does happen it will be a very diluted version to what they're currently saying.

Kenny4315

overlander wrote: »

Just think if this law came in you would still get your big house, clothes and holidays. Some initial pain but lots more disposable cash.

Salaries would plummet ..... mr plumber and mr electrician won't be getting £30 per hour if the new build house they are working on goes from say £200k to £100k. There wages will be downgraded or they won't get any work. The result is less tax revenue, salary reductions across the board, imports become more expensive compared to income, etc. It is not a good thing living in a cheap economy.

Really2

overlander wrote: »

Yes possible but most people with that sort of mentality have credit cards/Mew/Debt coming out of every orifice.

Why have you? Are you not saving a deposit?

Kenny4315

edgex wrote: »

also, less risk does not mean you can lend more:
the risk is based on what they reasonably expect to be able to sell the property for if they needed to reposess.

if the bank has a property valued at £100k, & they are willing to lend £90k, it dosnt matter if you have a £50k deposit, they wont lend you any more than the £90k.

On the same salary.

If the house is £100k and you have £10K then the banks lending £90k.

If the house is £150k and you have £50K then the banks lending £100k

Which is less risky for the bank if the market fall 10% ??

overlander

Really2 wrote: »

Why have you? Are you not saving a deposit?

After i replied i did think it sounded not right. I was getting at the type of person who pushed house prices up were the must have it now brigade, 7x salary no problem where do i sign. But the saver is more prudent i do not think they would get sucked in so easily plus lets be honest if the debt figures are correct most people would struggle to save 30K, anything less will have no great effect. I do see where your coming from but people who can save massive amounts will be a minority so no major overall effect.

edgex

so
how did the economy even manage to keep going when the 3x multiplier was the norm?
or when it was just the males that worked, so mortgages for family houses were based on 1 income, not 2?


BTL's:
thats really simple
they are a commercial transaction, & should be treated as such, commercial mortgage, calculated on a commercial basis, ie. what is the rent achievable, & therefore what is the property worth.
none of this 'oh itll rent out & go up in value anyway'



it is a minority of people that kept inflating the bubble, why should everyone else, & future purchasers, have to keep suffering because of their stupidity & greed?

Really2

edgex wrote: »

Disposable income:
could it be that those people currently in the market with large deposits have actually spent some time saving up, & not buying every new shiny thing that comes along.
or they could have inherited some money, or had a few good bonuses etc etc
I dont think theres any connection between income & deposit.

You miss my point if houses did come down to 3X salary people would have more disposable income.

So yes they have saved but again thouse who can save faster and longer than others will push the price up and up.

The average FTB age I think would increase as 50% deposits may be needed to get a property as you will be competing with every deposit out their for property.

It happened with mortgages why the hell does anyone think it would be any different with a "savings culture"

Like I said look at China.

overlander

chucky wrote: »

people coming out of a Fixed rate on a high salary multiple and remortgaging would find it impossible to get a new mortgage deal.

how do you calculate BTL's for example.

this regulation is just blue sky thinking - if it does happen it will be a very diluted version to what they're currently saying.

Good its these idiots who got us in this mess.

dopester

Really2 wrote: »

Well given a lot on here have £50K-£100K deposit saved I would say it proves a 3X salary will never happen.

That isn't a deposit.

£25Kpa x 3 and a bit extra = enough to buy outright on a nicer home in a nicer area. :rotfl:

I wouldn't count on their being a big ratio of buyers sitting ready with such high "deposits" available to them.