Vote on 3x salary mortgage cap

penguine

Really2 wrote: »

IF 12% IR came in people would be geting 12%+ wage increases! It makes no difference.

Did this happen in the 90s when interest rates went up to 15%?

(I wasn't living in the UK at the time so I don't know.)

Really2

penguine wrote: »

I think the 3x cap is a clear example of closing the stable door after the horses have bolted, but it's still a good idea anyway. It should help to protect those taking out a mortgage now from getting into trouble once interest rates go up again (which they will).

Would you like to run that by everyone?

Most people default because of a number of debts not just a mortgage
Is low earener on a 3X mortgage with £100K of personal debt still a good bet?

Afordability is the key.

Anyway it is irrelevent it is not happening.;)

Really2

penguine wrote: »

Did this happen in the 90s when interest rates went up to 15%?

(I wasn't living in the UK at the time so I don't know.)

Yes both inflation led recessions have result in wage inflation.

Pobby(I think) will tell you how he held on to his job in the 70's and inflation made his mortgage debt virtualy dissapear.

huntersc

Dan: wrote: »

I can't believe this debate is still going on...

It seems the only people who are demanding a cap on 3 x salary mortgage lending are those desperate FTBers determined to get a cheap house regardless of anyone else or the future of the economy.

I'd like to see it and I'm far from a first time buyer, nor am I desperate about anything.

The world is full of stupid people. One only needs to read these forums. They have little financial acumen, little understanding of debt and responsibility (again, one can use the bankruptcy forum as an example) and as such are inclined, through their own docility and ignorance, to take whatever is on offer.

This applies to many areas of life. Fast food. McDonalds and the like really ought not to exist as ongoing, successful enterprises yet they do. Why? Because people take what they can get without asking questions.

We need to instill some sense into the mortgage market and make sure that if you find it difficult to add two and two together you really ought to be declined for a mortgage rather than being offered an extraordinary amount as has been the case for the last few years.

Is the 3x multiple the optimum solution? Probably not but as it goes it will do fine thank you very much.

I have spent the past few years in Frankfurt, Zurich, NYC, Berlin and no where have I seen the people being so ready to take on debt than in the UK. People in Germany don't get a loan to buy new clothes, they don't put £20k on credit cards, no, they save. The British public equates the ability to take on debt with some kind of perverse sense of freedom of choice. It's nonsense. Debt is not freedom by any stretch of the imagination. Anyone that's in debt can attest to this.

The places that I've mentioned, people borrow to buy houses, they generally have around a 3X multiple. They don't complain. Why? Because houses are affordable. The problem we have here is a property market kept at artificial levels by massive borrowing.

Reduce the borrowing and we might even end up with some kind of social justice. It's no surprise to me that those most ready to take on debt and most hurt by it are the poor. It's like throwing an alcoholic a beer. The poor don't need to borrow more, they need house prices to be reduced and to borrow less.

I think it's time to concentrate on saving money rather than spending other people's money and calling it our own.

Graham_Devon

Really2 wrote: »

So overpaying in such times like now evens out the bad times.

[strike]You really [/strike] It really is that simple

Why do they not do 10 and 25 year morgages at 18% Graham:rolleyes:

IF 12% IR came in people would be geting 12%+ wage increases! It makes no difference.

You really are being so simplistic.

Mortages are not simplistic.

When inflation was up at 12% LOADS of people lost their jobs too. So they didnt get a 12% rise at all.

If you want to debate, debate, but you really are cherry picking and living in la la land here with the examples you are choosing.

Graham_Devon

May I also say I have noticed that most of those on here who seem to be aposed to this 3x thing, have some personal interest in the BTL market.

Few from the last couple of pages have been talking about their investments and how they are ready to take on a holiday home etc in cornwall.

Sour grapes if this comes in I guess.

stevetodd

MrFonzerelli wrote: »

I wanted 2 x but it wasn't an option. oh and my hand slipped and i accidentally clicked on no limit...

Seriously, I presume BTL wouldn't be impacted, as the calculation isn't usually on salary multiple. Won't be so many FTBs though. So more tenants for you then Steve!

Also according to their website the FSA does not regulate BTL mortgages so as you say they would not be effected:

Buy-to-let mortgages

Although we regulate the way the majority of mortgages are sold, in most cases we don't regulate buy-to-let mortgages. This means you may have less protection if things go wrong with a buy-to-let mortgage. Buying a property to let is a long-term investment which you hope will generate an income from rents and a capital gain when you sell the property. There is no guarantee that you'll make a profit on your investment.

stevetodd

Graham_Devon wrote: »

May I also say I have noticed that most of those on here who seem to be aposed to this 3x thing, have some personal interest in the BTL market.

Few from the last couple of pages have been talking about their investments and how they are ready to take on a holiday home etc in cornwall.

Sour grapes if this comes in I guess.

The FSA does not regulate BTL mortgages, so they would not be regulated. I guess that would make it quite hard for the locals to outbid landlords

mitchaa

Graham_Devon wrote: »

No. Thats part of the point.

There would be not BTL boom as amateur landlords wouldnt be able to get the mortgage therefore they wouldnt be able to buy the property.

Only established landlords with proper cash in the bank would be able to purchase them under business guises.

The Wilsons would not stand a chance under this regulation. And a good thing too, considering they are basically bankrupts now costing us all.

Not at all as we are speaking about singular 3x restrictions.

There are 2 in a couple, and if both are earning decent salaries what's to stop the other buying a home as investment, i.e BTL.

If the male part of the equation can have a mortgage to buy an average priced home, why cant the female part of the equation opt for a seperate mortgage for another house also?

If you want to play the singular 3x card, then BTL will boom as multiple homes will become the norm for couples.

Graham_Devon

stevetodd wrote: »

The FSA does not regulate BTL mortgages, so they would not be regulated. I guess that would make it quite hard for the locals to outbid landlords

It doesn't regulate 3x income either. But we are talking about changes. It was mentioned earlier BTL mortgages could cease to exist.