Vote on 3x salary mortgage cap

overlander

The bottom line is the old system has not worked. Your average punter is as thick as !!!!! and greedy to boot. The banking system was all to willing to exploit stupid people taking on silly multiplies and 100% + mortgages. The bottom line is stupid people need regulated and so do greedy banks. Until people actually realise that debt is not wealth they need regulated.

JoolzS

I voted for the 3X cap because it seemed to work.

Back when I was buying my current home it wasn't even 3X salary - but 3X basic salary plus something the lender may allow you for overtime/bonuses.

It seemed to become 5ishX salary including overtime and bonuses so long as you got them in the past three months. I never saw the point of that - other than people buying property they couldn't afford.

Around 15 years ago I do remember struggling to get the mortgage to buy the flat I currently live in because I needed 3.25X my salary. I knew I could afford it because I was buying with my, now, DH but he couldn't be named on the mortgage because he had a repossession. His income was higher than mine, but we could only use mine for the mortgage. It took me about 12 weeks to persuade the mortgage company that I could really afford the mortgage.

Around five years ago the same mortgage company were prepared to lend us over 4X DHs salary (including overtime and bonuses) if we moved - just because we'd always been good customers.

This makes no sense to me other than it causes house prices to rise beyond the reach of normal working people.

Julie

LilacPixie

I think that having a blanket mortgage cap, be it 2x, 3x, 4x whatever is stupid. everyone, every area and every mortgagee has its own specific circumstances and trying to make 'one size fits all' regulations will just not work.

I think someone earning close to the minimum wage would struggle with a mortgage of 3x salary and have enough money for some luxury items like a car alot more than someone on say 50k with a 3x mortgage.

Is this proposed 3x thing single or joint income?

lostinrates

Cat695 wrote: »

Damn looks like i best find a different hobby;)

I have hands like shovels so don't think they make needles big enough.....but seriously for the past year its all thats been on my mind....to buy a house to live in and start enjoying being settled.

I'll have a pension at 40 not big bucks but will be enough that I won't need to worry to much about money. Hence why I think I want to make sure I'm doing the right thing....I don't want to be someone who has acheived so much in life to just fail.

LOL, you really are nesting aren't you?! Cat, I don't think the setting and the house and failure are mutually exclusive. You can have all three or any combination of the above. I understand transition out of the forces can be extraoridarily hard, and it might be your desire to settle helps you with getting used to it, but alternatively it could mean you are putting yourself under a bit of pressure. 40 is young (uness it were me, if I hit forty it'll be old, old old) and certainly time to make a success of a second career and domestic life without rushing into anything!

ETA: big hands? pension at forty? horseriding? sense of humour? nesting instinct? desire to suceed? You'll find a woman easily

GDB2222

LilacPixie wrote: »

I think that having a blanket mortgage cap, be it 2x, 3x, 4x whatever is stupid. everyone, every area and every mortgagee has its own specific circumstances and trying to make 'one size fits all' regulations will just not work.

It did work quite well all through the 20th Century, until thatcher deregulated.

julieq

GDB2222 wrote: »

It did work quite well all through the 20th Century, until thatcher deregulated.

Total rubbish. There was a 3x/2.5x salary cap right through the Thatcher era and the 1980s property boom, when interest rates were far higher anyway because of the residual effect of inflation in the 1970s so the repayments were a far higher proportion of net income.

Bigger multiples, self certification and 120x LTV are a product of the last few years. They come from the availability of cheap money, economic growth, and relatively low inflation, which raised confidence. Thankfully Labour have done a good job in addressing the root causes of those issues.

ad9898_3

The 3x cap would be excellent news if implemented, why do people want to borrow more , more debt doesn't mean you are richer, it means you are poorer, if the average house comes down to 100k, then rises with wage inflation over time, we will have put an end to the ponzi scheme that has blighted many a family over the past 38 years.

In that time we have had 4 booms and 4 busts, why would anyone advocate that this is a good thing, unless of course you bought in 2001-2007 and are highly leveraged, in which case I agree it's not good news for you, but if we allow this to continue, it will just happen again in 10-20 years time, blighting the lives of your children or grandchildren, I think it best we take the medicine now.

dgl1001

Were do you start. Impacts of the 3 x mortgage restriction will lead to:
- Initial reduction in property prices and land values
- Greater demand for properties priced at at the lower end of the market
- This will lead to greater demand for them (pushing up prices) and greater demand for council housing, leading to an increase in taxes
- No new development of apartments (too costly) which will further restrict housebuilding and place greater demand on the existing stock
- As urban capacity sites won't be viable, there will be a greater need for greenfield development
- because of the lack of properties in the lower sector, home ownership will become more and more difficult, meaning BTL landlords will prosper.

Not such and good thing afterall

whathavewedone

Interesting how the majority of people polled are in favour of the cap but the majority of posters on the thread are against it.

I think some HPCers have got wind of this poll and come over to post en masse.

A load of them are writing letters to the press, lobbying mps etc to try to get their voices heard.

Graham_Devon

b0rker wrote: »

I can only assume that you are 1 year into a 10 year fixed rate at 3.99% or something.

No, I'm on SVR at 3.50% currently.

Everything you have assumed so far is completely incorrect!