Tighter lending rules mean 10-year wait for first-time buyers

mystic_trev

First-time buyers who cannot raise a deposit from the “Bank of Mum and Dad” are being forced to rent or remain in their parents’ home 10 years longer than middle class “first timers” one building society claims, as regulators propose to make lending rules even tighter.

http://blogs.telegraph.co.uk/finance/ianmcowie/100006877/tighter-lending-rules-mean-10-year-wait-for-first-time-buyers/

doire_2

mystic_trev wrote: »

http://blogs.telegraph.co.uk/finance/ianmcowie/100006877/tighter-lending-rules-mean-10-year-wait-for-first-time-buyers/

And we know what happens without FTB

Idiophreak

Not sure I buy this...if an FTB wants to buy and can afford to buy, they'll find a way to buy.

chucky

doire wrote: »

And we know what happens without FTB

yes the wannabe FTBs have to rent...

FTBFun

First-time buyers who cannot raise a deposit from the “Bank of Mum and Dad” are being forced to rent or remain in their parents’ home 10 years longer than middle class “first timers” one building society claims, as regulators propose to make lending rules even tighter.

Err....i'm a middle class FTB with no Bank of Mum and Dad contribution whom has been renting for 5.5 years. How do I fit into the model?

treliac

http://news.bbc.co.uk/1/hi/business/10606475.stm

The proposals form part of a review of the UK mortgage market undertaken by the FSA, which has looked at the causes of arrears and repossessions over the past five years.

It found that almost half of households either had no money left, or had a shortfall after they had paid their monthly mortgage bill and deducted living costs from their income.

It also found a similar proportion of new mortgages between 2007 and the first three months of 2010 were agreed without the customer having to verify their income.

The share of interest-only mortgages has also been increasing, the watchdog said, with some mortgage holders having no plan on how to repay the capital loan.

Some pretty shocking statistics here. I can't see how anyone can object to measures designed to protect people from such folly which is likely to result in acute distress, upheaval and loss of security for themselves and their families if they lose their homes further down the line.

HAMISH_MCTAVISH

doire wrote: »

And we know what happens without FTB

Investors buy instead, and use the potential FTB's to pay the landlords mortgage for them when they could have been paying their own mortgage.

So now FTB's without rich parents are to be locked out of the market for 10 years, because of the lending retrictions the bears wanted.

Nice.

Harry_Powell

Looks like there will be a large upsurge in the BTL market once people figure out that there is a going to be such a huge demand for decent rental properties while FTBers save up those deposits. With people having such a downer on traditional pensions, looks like property will be the investment of choice for many.

treliac

HAMISH_MCTAVISH wrote: »

So now FTB's without rich parents are to be locked out of the market for 10 years, because of the lending retrictions the bears wanted.

Two points:

• How many have rich parents? Not a huge number I'd guess. Far too many middle-aged parents are still struggling with their own mortgages.

• What's wrong with having to save for a deposit, prove affordability and waiting to buy with more confidence of being able to service the debt? It's the way things used to be done and they used to work fine.

System

treliac wrote: »

What's wrong with having to save for a deposit, prove affordability and waiting to buy with more confidence of being able to service the debt? It's the way things used to be done and they used to work fine.

Nothing at all imo, problem is the banks want outrageous deposits nowadays for a decent rate.

From what I can see, the biggest stumbling block to buying a place is the deposit.

Say you're buying a place for 100k, and you need 25% for a decent rate.

25k deposit needed.

Even if prices fall a massive 20% it's still only going to save £5k on that deposit.

The only way to get more FTBers is for banks to start offering better rates for 10%ers. Which is NEVER going to happen if prices fall again.

sarkin1

Joeskeppi wrote: »

Nothing at all imo, problem is the banks want outrageous deposits nowadays for a decent rate.

From what I can see, the biggest stumbling block to buying a place is the deposit.

Say you're buying a place for 100k, and you need 25% for a decent rate.

25k deposit needed.

Even if prices fall a massive 20% it's still only going to save £5k on that deposit.

The only way to get more FTBers is for banks to start offering better rates for 10%ers. Which is NEVER going to happen if prices fall again.

dont forget the 3.5% arrangement fee
val fee £350
Solicitors £695 plus vat and disbursements (stamp duty, searches and stuff)

I make that about £5,500

Oh and my broker fee £495 thankyou

£6000 pounds just in fees

And what is the rental income from a 1 bed flat £550 tops

and if rates go up......