We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
FSA review confirms NO RESTRICTIONS on Loan To Value/Income...
Comments
-
Entertainer wrote: »Tell me Mctavish, what is the limit to this lending? Would 7x salary LTI multiple be alright by you? Would house prices at 7x average earnings be fine?
If you keep nominal interest rates low enough everyone can have JulieQ mortgages and just juggle their debt and hope that inflation erodes some of it over 25 years. Where does it stop? Tell me.
It stops at the point where the risk/return stops stacking up for the lender.
If you stop posturing about the UK situation and really focus on what caused the present crisis, it was about reckless lending in the US without any requirement from the lenders' point of view to get the loans repaid, because they were packaging the loans up and selling them on. The appetite from financial institutions for buying these products had nothing to do with UK multiples, or indeed UK lending, it was based on a feeding frenzy of greed on the back of what seemed to be easy money without risk. The only thing the original lenders cared about was getting more debt into their pipeline because that gave them more products to sell to the banks.
On any measure, UK mortgages have low default rates. Multiples derived at a time of 10% rates can easily be doubled at 5% rates without affecting affordability or increasing risk. So there is room to increase still, and as we've seen there's a big supply side problem pushing up prices even on the back of the worst financial crisis anyone has ever seen.
And as to the idea that everyone will emigrate if they can't afford to buy houses, that's a spurious argument. Not everyone can, and the more likely you are not to have earnings allowing you to buy, the less likely you are to have marketable skills abroad. It's a competitive world.
In any case, as I've pointed out, rates of ownership are high here. There's certainly no reason at all why we shouldn't return to the historical norm of a few people holding property and renting or leasing it to the rest, but there's no sign of that happening. Mass home ownership is a product of Thatcherite deregulation of the mortgage market, which is ironic given the apparent desire from the bear side to reimpose heavy regulation.0 -
How will capping mortage lending at 3 or 3.5 times salary help FTB's?
It will stop creating assest bubbles such as housing. The simple equation is the more that can be lent the higher the prices will go.
Keynesian Economics has for a long time been debunked, its return will just make the problem worse like it did before. It has never worked and is just being adopted by government to appear that they are doing something rather than facing the reality and taking the hard path to recovery.
High multiples and low interest rates just causes more debt it does not make the country richer. The sooner people realise that this is bad the better.
Higher interest rates, lower property prices and larger personal savings make for a healthier economy.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
0 -
It will stop creating assest bubbles such as housing. The simple equation is the more that can be lent the higher the prices will go.
Keynesian Economics has for a long time been debunked, its return will just make the problem worse like it did before. It has never worked and is just being adopted by government to appear that they are doing something rather than facing the reality and taking the hard path to recovery.
High multiples and low interest rates just causes more debt it does not make the country richer. The sooner people realise that this is bad the better.
Higher interest rates, lower property prices and larger personal savings make for a healthier economy.
Whatever.
Your personal wish for capped mortgage lending based on salary is not going to happen, surely you know this by now?
Welcome to the 21st century, where you need to demonstrate your ability your handle credit, and prove affordability to get a mortgage.0 -
Whatever.
Your personal wish for capped mortgage lending based on salary is not going to happen, surely you know this by now?
Welcome to the 21st century, where you need to demonstrate your ability your handle credit, and prove affordability to get a mortgage.
Are you mad????
Have you missed the credit crunch which we are in. This was caused by looney lending on principly property. Last year the international economy was on its knees and it is still hurting not recovering one bit.
Your vission will bring economic amegendon, its time we stop this failed Keynesian rubbish and addopt the proven Austrian/Libertarian model.:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
0 -
Are you mad????
Have you missed the credit crunch which we are in. This was caused by looney lending on principly property. Last year the international economy was on its knees and it is still hurting not recovering one bit.
Your vission will bring economic amegendon, its time we stop this failed Keynesian rubbish and addopt the proven Austrian/Libertarian model.
All America's fault.
Nothing to do with the rest of the world. America's fault. Sub prime lending, which we never had here was the problem. America, america, america.
However, that only applies if were talking property and lending. If we are talking recession, then it's a global problem, not just america, but global.0 -
Keynesian Economics has for a long time been debunked, its return will just make the problem worse like it did before. It has never worked and is just being adopted by government to appear that they are doing something rather than facing the reality and taking the hard path to recovery.
.
You mean at the Adam Smith institute or the like
A quote off their website
Unfortunately, Keynes is all the rage now.
I thought last years Nobel economics prize winner was a Keynesian
Here he describes the General Theory as the most important economics book ever written, what was that about debunking
http://www.youtube.com/watch?v=CVHWlnbJsC4'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Are you mad????
Have you missed the credit crunch which we are in. This was caused by looney lending on principly property. Last year the international economy was on its knees and it is still hurting not recovering one bit.
Your vission will bring economic amegendon, its time we stop this failed Keynesian rubbish and addopt the proven Austrian/Libertarian model.
julieq has already explained that it was Slimey Septic salesman from over the pond that created this mess by selling mortgages that they could sell on with no comeback (just take the commission).The default rates in the UK have not been a problem.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
Graham_Devon wrote: »All America's fault.
I loved it when Brown was blaming America and every one else. He had nothing to do with raiding final salaries schemes, selling our gold cheap and promoting high house prices (shared ownership/equity).
Remember an end to boom and bust
:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352K Banking & Borrowing
- 253.5K Reduce Debt & Boost Income
- 454.2K Spending & Discounts
- 245K Work, Benefits & Business
- 600.6K Mortgages, Homes & Bills
- 177.4K Life & Family
- 258.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards