MSE News: Halifax: house prices up for third successive month

Graham_Devon

julieq wrote: »

That's a very narrow view though. You miss the other side of the issues which is the extreme difficulty of building new homes in this UK because of the planning process, and the desirability of living here because it's an English speaking country in the first world with a temperate climate. That's what feeds demand. There wasn't really excessive lending, I believe 3.5 salary was the maximum loan at any time during the boom.

Sorry, this is simply wrong.

Even I could have had a 7x my wages loan at 110%. I've wrote about it before.

3.5x was never the maximum, otherwise 125% loans could simply not have happened.

Really2

Graham_Devon wrote: »

Sorry, this is simply wrong.

Even I could have had a 7x my wages loan at 110%. I've wrote about it before.

Who was that with?

I had heard that they went to 5X for some lenders, never seen 7 times.

Graham_Devon

Really2 wrote: »

Who was that with?

I had heard that they went to 5X for some lenders, never seen 7 times.

I don't know. It was done through my mortgage advisor, and was probably a liar loan. But he got me access to x amounts of thousands which worked out just shy of 7x my income.

But know NR offered just under 6x.

Edit: Just did a search on google, and got a result from MSE...this is from a mortgage advisor in response to someone looking for a 6x loan...

I believe that Standard Life, Bristol and West and Abbey will do Professional Mortgages, but they will only go up to 5x income. Out of those, I would recommend Standard Life as they are lovely to deal with, flexible in their approach and will go up to 100%.

If you want more than x5 income, you'll probably have to go off the High Street (although come to think of it, Alliance & Leicester's affordability calculator is quite generous and might get you 6x).

Off high street could get you around 7x, but you would have to approach an intermediary for that.

Happy Hunting

baileysbattlebus

Graham_Devon wrote: »

I don't know. It was done through my mortgage advisor, and was probably a liar loan. But he got me access to x amounts of thousands which worked out just shy of 7x my income.

But know NR offered just under 6x.

I must admit I have never known 7x either (seriously scary) - but my daughter & partner got their FTB mortgage through Nationwide and it wasn't based on income multiples - it was based on affordability - they borrowed £185k with a 5% deposit - with no debts and at the time earned about 48k between them - this was the maximum they could borrow.

With their debts they could have borrowed £167k max - so they paid the debts off. The debts were a car loan with £8k outstanding (him) and a credit card with £3k outstanding (her). He sold his car for £13k and bought a Golf with the money left over.

So just under 4x with no debts and about 3.5x with their debts. Most of their friends who bought at a similar time, there were a raft of them over the course of about a year, all in their mid to late 20's, had similar multiples - one was self employed and her father stood as guarantor for her - she bought on her own.

100%+ mortgages don't necessarily mean mega multiples, though obviously it can - our first mortgage was nearly 100% - it was 3x salary.

Edit: Just read your next post - about off high street lenders.

julieq

Sorry, 3.5x was the average of loans to salaries of applicants during the period as I recall, not the maximum theoretically available. A small number of loans were at high multiples, most weren't. It's really a bit of a myth to say that high multiples was the primary factor for inflated prices: in some very restricted circumstances they were available, but they weren't the norm. Arguably 100 or more % mortgages were more significant because they vastly reduced the barrier to entering the market. Looking at the ratio of average house price to average household income you don't need high multiples anyway.

Really2

Nice map here. that gives LTV for the country over 2006 and 2007

http://www.mortgages.co.uk/mortgage-trends/year/average-loan-to-value-06-07.html


lets not get confused that 100%+ was the norm.

Also average purchase price and the average mortgage.
http://www.mortgages.co.uk/mortgage-trends/year/average-property-price-06-07.html
http://www.mortgages.co.uk/mortgage-trends/year/average-mortgage-value-06-07.html

Interesting data.

Graham_Devon

baileysbattlebus wrote: »

I must I have never known 7x either (seriously scary) - but my daughter & partner got their FTB mortgage through Nationwide and it wasn't based on income multiples - it was based on affordability - they borrowed £185k with a 5% deposit - with no debts and at the time earned about 48k between them - this was the maximum they could borrow.

With their debts they could have borrowed £167k max - so they paid the debts off. The debts were a car loan with £8k outstanding (him) and a credit card with £3k outstanding (her). He sold his car for £13k and bought a Golf with the money left over.

So just under 4x with no debts and about 3.5x with their debts. Most of their friends who bought at a similar time, there were a raft of them over the course of about a year, all in their mid to late 20's, had similar multiples - one was self employed and her father stood as guarantor for her - she bought on her own.

100%+ mortgages don't necessarily mean mega multiples, though obviously it can - our first mortgage was nearly 100% - it was 3x salary.

Edit: Just read your next post - about off high street lenders.

As you can see above. I have quoted a mortgage advisor stating what was out there.

Whether your daughter got something different or not is a slightly different matter and doesn't quite mean these mortgages did not exist or that 3.5x was the maximum.

I got something different in the end. Basically 1.5x! Again, thats just me.

baileysbattlebus

Graham_Devon wrote: »

As you can see above. I have quoted a mortgage advisor stating what was out there.

Whether your daughter got something different or not is a slightly different matter and doesn't quite mean these mortgages did not exist or that 3.5x was the maximum.

I agree - it doesn't - her multiple was about 4x from Nationwide - with no debt - I guess it's pity more lenders weren't a bit more careful with the amounts they were prepared to lend people.

TBH, I've not known anyone who hasn't used a normal high street lender.

Graham_Devon

julieq wrote: »

Sorry, 3.5x was the average of loans to salaries of applicants during the period as I recall, not the maximum theoretically available. A small number of loans were at high multiples, most weren't. It's really a bit of a myth to say that high multiples was the primary factor for inflated prices: in some very restricted circumstances they were available, but they weren't the norm. Arguably 100 or more % mortgages were more significant because they vastly reduced the barrier to entering the market. Looking at the ratio of average house price to average household income you don't need high multiples anyway.

It's not a myth. It wasn't small numbers of loans. Most were at higher multiples.



Thats the average.

The average of 3.5x ended in 2002.

Kenny4315

I'M very glad I'm a home owner and have some BTL's given the current House Price Boom ........

especially when the BTL is on 1.65% above base !! :money: