Vote on 3x salary mortgage cap

GDB2222

julieq wrote: »

Total rubbish. There was a 3x/2.5x salary cap right through the Thatcher era and the 1980s property boom

Do you have any backing for that statement? FTBs were paying 5.5 x earnings in 1988 for houses in London, and that was nearly all borrowed. Data is available here: http://www.nationwide.co.uk/hpi/historical.htm

That was a marked increase compared to say the 1970's.

Renfro

whathavewedone wrote: »

The reason people are saying it's nannying is because it prevents people who are sensible and earning well from spending their money how they wish.

It's got nothing to do preventing people from spending "their" own money how they wish. If someone has a couple of million sitting in the bank and wants to spend it all on a single property, then nobody is going to stop them spending it in that way.

The 3x cap (not that I necessarily agree with it) is about limiting what people can "borrow".

If you need to borrow (because you don't have sufficient funds) then it's hardly spending your own money, is it?

Dan:_4

Renfro wrote: »

It's got nothing to do preventing people from spending "their" own money how they wish. If someone has a couple of million sitting in the bank and wants to spend it all on a single property, then nobody is going to stop them spending it in that way.

The 3x cap (not that I necessarily agree with it) is about limiting what people can "borrow".

If you need to borrow (because you don't have sufficient funds) then it's hardly spending your own money, is it?

If you have to spend years 'saving' to buy the house of your dreams, whats the point in mortgages?

baileysbattlebus

GDB2222 wrote: »

Do you have any backing for that statement? FTBs were paying 5.5 x earnings in 1988 for houses in London, and that was nearly all borrowed. Data is available here: http://www.nationwide.co.uk/hpi/historical.htm

That was a marked increase compared to say the 1970's.

We were offered 4 x salary when we moved to the south east in 1986 - multiples higher than 3 were quite common, if I remember correctly.

We didn't take it - we bought a cheaper house - but it was there if we wanted it.

System

ITT: People who want to buy a house vote yes and people who own a house vote no.

*Stay tuned for more exciting updates*

Renfro

Dan: wrote: »

If you have to spend years 'saving' to buy the house of your dreams, whats the point in mortgages?

To make up the difference.

Just because people want the "house of their dreams" right now, it doesn't mean they have some God given entitlement to it. Either they get a house they can afford (which may not be perfect) or they save up for what they really want.

How is this different to buying anything else?

Dan:_4

Renfro wrote: »

To make up the difference.

Just because people want the "house of their dreams" right now, it doesn't mean they have some God given entitlement to it. Either they get a house they can afford (which may not be perfect) or they save up for what they really want.

How is this different to buying anything else?

I agree with this.

ILW

I believe all loans should be based on affordability assuming an interest rate of say 12%. It has happened before and could very well happen again.

Really2

ILW wrote: »

I believe all loans should be based on affordability assuming an interest rate of say 12%. It has happened before and could very well happen again.

So why not an average. 1% as happened before not a good reason to use it thoug is it?

MBM

Looks like it was all scaremongering by the papers again as "The report also said that the idea of regulation in the mortgage market should be debated - but that it was too early to put forward specific action."
Don't you just love the papers!!