Average first-time buyer age to rise to 43

IveSeenTheLight

Generali wrote: »

In that case, why lend to the riskier end of the market? The profit just isn't there compared with people that have a lot of equity in the house.

In which case, we need to accept that the FTBer age is likely to increase and the opportunity to be an owner will decrease.

Generali

IveSeenTheLight wrote: »

In which case, we need to accept that the FTBer age is likely to increase and the opportunity to be an owner will decrease.

Yup. Nail <=> head.

ILW

IveSeenTheLight wrote: »

In which case, we need to accept that the FTBer age is likely to increase and the opportunity to be an owner will decrease.

That is unless prices drop significantly.

IveSeenTheLight

ILW wrote: »

That is unless prices drop significantly.

Yet we've already seen a 20% correction in prices and all that did was restrict lending, increase deposit requirements and thus restricts potential FTBers increasing their age at buying anf reduces opportunities to become an owner.

Graham_Devon

IveSeenTheLight wrote: »

Yet we've already seen a 20% correction in prices and all that did was restrict lending, increase deposit requirements and thus restricts potential FTBers increasing their age at buying anf reduces opportunities to become an owner.

Be fair

There was a bit more involved in the restriction in mortgage lending that just falling prices.

The whole credit industry was up in the air!! Be that business loans, car loans, credit cards or mortgages.

ILW

Graham_Devon wrote: »

Be fair

There was a bit more involved in the restriction in mortgage lending that just falling prices.

The whole credit industry was up in the air!! Be that business loans, car loans, credit cards or mortgages.

I think part of the problem is that many potential FTBs look onlt at about the last 10 years of mortgage lending and think that is the norm. No deposit, no proof of income etc were a recent abberation that we are unlikely to go back to in the near future. I can see 10% deposits becoming the norm for those with a decent credit file and secure employment, along with sensible earning to loan ratios. Just like it used to be.

IveSeenTheLight

Graham_Devon wrote: »

Be fair

There was a bit more involved in the restriction in mortgage lending that just falling prices.

The whole credit industry was up in the air!! Be that business loans, car loans, credit cards or mortgages.

We have recently discussed in this thread (courtesy of discussions with Generali and yourself [can;t be ar5ed getting thread quotes right now]) that banks would want to give themselves security.

Hence as prices fall, banks would want to up their deposit requirements, regardless of credit availability.

Surely that's fair

IveSeenTheLight

ILW wrote: »

I think part of the problem is that many potential FTBs look onlt at about the last 10 years of mortgage lending and think that is the norm. No deposit, no proof of income etc were a recent abberation that we are unlikely to go back to in the near future. I can see 10% deposits becoming the norm for those with a decent credit file and secure employment, along with sensible earning to loan ratios. Just like it used to be.

I don;t disagree a modest deposit percentage and decent credit file are likely to be the norm.

I do disagree with the income to earning ratio aspect as two people could have the same income but vastly different outgoings, thus disposable income is a far better measure than simply income.

It comes down to whether the bank thinks that the person who will be paying the mortgage can afford the repayments or not.

Emy1501

IveSeenTheLight wrote: »

I do disagree with the income to earning ratio aspect as two people could have the same income but vastly different outgoings, thus disposable income is a far better measure than simply income.

It comes down to whether the bank thinks that the person who will be paying the mortgage can afford the repayments or not.

This is how the FSA guidelines work these days. Its all based on affordability rather than the old 3-4X joint etc. 4-5x joint is still the guideline but lenders have to deduct from that monthly loan repayments and also 3% a month in respect of any outstanding credit cards etc, Lenders will also take into account childcare expensive hobbies etc. Most lenders lending towards the top of the ratio will also want to see 3-6 months bank statements to see what the borrowers outgoings are and what their disposable income is. The days where lenders offered 4-5X joint without questions or evidence to support affordability are over over for the vast majority.

olly300

ILW wrote: »

I think part of the problem is that many potential FTBs look onlt at about the last 10 years of mortgage lending and think that is the norm. No deposit, no proof of income etc were a recent abberation that we are unlikely to go back to in the near future. I can see 10% deposits becoming the norm for those with a decent credit file and secure employment, along with sensible earning to loan ratios. Just like it used to be.

Unfortunately for many people there is no such thing as secure employment regardless of what sector, public or private, you work in. Even teachers can and have been made redundant since the 80s.