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Debate House Prices
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3M homeowners wouldn't get mortgages today
Wookster
Posts: 3,795 Forumite
Rate rise threat for 3m home owners
Almost three million homeowners would struggle to pay their mortgage if interest rates rose by just 2 percentage points, according to new industry figures seen by The Sunday Telegraph. This equates to more than one in three (37pc) of all mortgage holders.
Rate rise threat for 3m home owners Photo: Howard McWilliam
Even if rates rose by less than 2 points, an estimated 1.6 million mortgages would be deemed "unaffordable", according to guidelines set out by the Financial Services Authority.
There are growing concerns that interest rates might rise sooner than previously predicted, given last week's better than expected growth figures. This would cause further misery for many struggling families, already facing rising taxes, higher-than-expected inflation and the prospect of widespread job losses, particularly in the public sector.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8097272/Rate-rise-threat-for-3m-home-owners.html
Interesting article - if correct then this shows just how much loose lending standards & excess credit contributed to the huge house price bubble.
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I sort of think there is more to this than just blaming lax lending. Imagine a buyer in 2007 with a 10% deposit taking a 3 year fix at say 5% - could either they or the lender have anticipated that at the end of the fix period they were likely to go on to a variable rate 5% above base?I think....0
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3M homeowners wouldn't get mortgages today.
Just so we're clear.....
The "solution" the bears propose for 'millions of people being priced out'......
Is to make millions of people ineligble for mortgages so they can't buy a house?
Genius.:cool:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Just so we're clear.....
The "solution" the bears propose for 'millions of people being priced out'......
Is to make millions of people ineligble for mortgages so they can't buy a house?
Genius.:cool:
Wrong forum Jock. Read the title.0 -
HAMISH_MCTAVISH wrote: »Just so we're clear.....
The "solution" the bears propose for 'millions of people being priced out'......
Is to make millions of people ineligble for mortgages so they can't buy a house?
Genius.:cool:
With the shortgage of property that we are told that we have in the UK, it seems only reasonable to control lending so that prices aren`t forced ever higher. If lending is "loosened" again, we`ll still end up with the same shortage, but higher prices.
Tight lending criteria ensures that more "financially sound" buyers can borrow. Those with lower incomes, or lower quality credit histories are kept out.
Build more houses, allow more people to buy.
Don`t build more houses, don`t pour petrol on the fire by lax lending.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
If I still had my house I'd be unmortgageable.... they kind of like you to have a job
- although I do have an income of sorts.
To have re-mortgaged that house it'd be a 25% LTV.
When I bought it, it was at 80% LTV (had to avoid the MIG of about £1k at the time) - and was at 2.5x single salary. When I sold it the mortgage was at 4x single salary as I'd had several changes of circumstances and just clung on for dear life... at one point it was 6x single salary (those were the lights out/cold bean eating years).
When I sold it, the sold value was at about 17x single salary if I were buying it.0 -
PasturesNew wrote: »When I sold it, the sold value was at about 17x single salary if I were buying it.
Not exactly sustainable.
And there was hamish saying prices have never been more affordable.0 -
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“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Define lax lending.
You seem to ask that question rather a lot (I think I`ve seen you ask that before).
Rather than wear out my keyboard........
http://www.youtube.com/watch?v=vT1UnGS91BY
I know, it was only a small number of cases, and the FSA surely clamped down on it after the programme was broadcast.
They did, didn`t they ?30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
And there was hamish saying prices have never been more affordable.And a short while later, complaining about lack of mortgage lending.
I know the pair of you are capable of doing better than this.
It is a fact that the total cost of buying a house, including mortgage costs, is cheaper now than the long term average.
It is also a fact that most people without a house cannot take advantage of this, as they can't get a mortgage.
Explain why you think those two facts are contradictory?“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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