BOE to get more responsibilities.

the_flying_pig

IveSeenTheLight wrote: »

Do the Bank Of England have control over building properties?

If not, the only option they do have is fiscal policy, which does not resolve the root cause.

If the root cause is still there, you'll still have the underlying problems, just that you have to continue to manage the problem

Just no.

What does the Bank of England mean when it says it’s worried [in the words of this article] about “a bubble in the housing market, for example”?

I daresay we’d all agree that it’s referring to debt-related:

(1) households getting into trouble [leading to repossession and/or support by taxpayer] &/or going on mega pwoperdee ‘investment’ splurges at the expense of productive parts of the economy; and
(2) banks getting into trouble [due to lending too much/recklessly, falling pwoperdee values, etc].

I daresay that the BoE wouldn’t be worried at all about cash buyers [from the City of London, China, the moon, wherever it is that estate agents are looking to/fantasising about these days] pushing house prices very high, if such an outcome were to be plausible.

That’s why what the BoE is talking about is caps on borrowing and lending. Which, let’s face it, are kind of fairly sensible in the context of both (1) and (2) above.

Graham_Devon

IveSeenTheLight wrote: »

Is it a solution?
BTL didn's replace the social housing when it was sold off.
Where would people rent without BTL giving them that option?

BTL would still be availiable.

I'm just suggesting it would be simple, and also effective, to limit, or tax BTL lending so that your scenario doesn't play out (where the wealthy always win).

BTL is an investment. As such, IMO, it shouldn't gain all the protection homeowners gain and are currently gaining now. As it is, BTL as an investment is receiving rather large subsidies not only from the welfare bill, but also the current stimulus. No other investment vehicle has received this type of protection. Hence why BTL has taken off so massively and is now accelerating over actual ownership.

My suggestion does not have to cut off BTL. Yields would still exist. BTL products would still exist. However, they wouldn't be favoured, and wouldn't be protected alongside someone just trying to buy a house to live in.

The banks are freely admitting they are favouring BTL investments at the moment. Yet everyone just stands back and watches. Why? Because it suits all those who have the power to change things. As an ex labour politician said around the time of the flipping homes saga....its no accident that within the last decade those that have taken advantage of the systems have all used those advantages in property.

grizzly1911

IveSeenTheLight wrote: »

Is it a solution?
BTL didn's replace the social housing when it was sold off.
Where would people rent without BTL giving them that option?

Through social housing controlled by Government.

People complain about "nationalised" initiatives because they are inefficient.

The trouble with private initiatives is for inefficient read profit. Without another tier of control they cannot be "trusted".

I could mention care homes,who is now picking up the pieces? Or PFIs that are now being traded for a multiplier, based on the rental stream to be paid by Government (us).

grizzly1911

IveSeenTheLight wrote: »

What's your views on shared / part ownership where the buyer owns 50% or 75% of the property?

Personally I don't like them.

It is acknowledging the symptom but not treating the cause.

We have some new builds round here and I know some youngsters who have had to take advantage of them. Unless there is a total collapse in housing I would expect them to be stepping stones for them.

IMO it is social housing on the cheap (for the powers that be) as you have to provide some of the capital and risk.

shortchanged_2

IveSeenTheLight wrote: »

It is a choice.
My wife and I decided very early to live off one salary and pay down the mortgage with the other.

Years later when we decided to have children, we were in a position to still live off one salary as the mortgage had been reduced to such an affordable level.

It's all about choices in life

Thing is IveSeenthelight did you take a joint mortgage of more than 3 times your income or a more than 4 times single income mortgage?

chucky

shortchanged wrote: »

Go back to an absolute maximum 4 times single income and 3 times joint income mortgage.

funnily enough the average LTV is around 75% of all mortgages outstanding.

the income multipliers are about 3.5 x income.

IveSeenTheLight

grizzly1911 wrote: »

Through social housing controlled by Government.

People complain about "nationalised" initiatives because they are inefficient.

The trouble with private initiatives is for inefficient read profit. Without another tier of control they cannot be "trusted".

I could mention care homes,who is now picking up the pieces? Or PFIs that are now being traded for a multiplier, based on the rental stream to be paid by Government (us).

I'm interested to know how the government pay for this increased social housing.

Conrad

shortchanged wrote: »

Go back to an absolute maximum 4 times single income and 3 times joint income mortgage.

Strict proof of income for the self employed. (reduction of liar loans)

Have very strict criteria for interest only mortgages with the lenders requiring frequent checks for evidence of repayment vehicle

.

This is typical academic nonsense.


What if borrower 1 has no debts and is a good saver, compared to borrower 2 with little propensity to save, a big spender? Borrower 1 might manage perfectly well with 5 x income.

SE - the point is, net profits DO NOT reflect TRUE incomes. I sold my sole trader to my own LTD CO. This set up a £100k Directors loan account which comes off the turnover figure making my earnings appear far lower.

STATISTICS show arrears from self employed cases are only slightly higher than for employed, so where is your evidence that lending to self employed people / liar loans creates unmanagable system detriment?

INTEREST ONLY - you do realise that overpaying each month is often more effective than putting those SAME payments into a repayment vehicle with unknown future returns?

Honestly, stop getting your info from newspapers.

shortchanged_2

Conrad wrote: »

This is typical academic nonsense.


What if borrower 1 has no debts and is a good saver, compared to borrower 2 with little propensity to save, a big spender? Borrower 1 might manage perfectly well with 5 x income.

SE - the point is, net profits DO NOT reflect TRUE incomes. I sold my sole trader to my own LTD CO. This set up a £100k Directors loan account which comes off the turnover figure making my earnings appear far lower.

STATISTICS show arrears from self employed cases are only slightly higher than for employed, so where is your evidence that lending to self employed people / liar loans creates unmanagable system detriment?

INTEREST ONLY - you do realise that overpaying each month is often more effective than putting those SAME payments into a repayment vehicle with unknown future returns?

Honestly, stop getting your info from newspapers.

As I said conrad as far as I'm concerned and it's nothing to do with the newspapers, it's what I would see as sensible lending practice in order to create a more sensible and sustainable housing market in the future.

It's what this country needs. Strict regulation in lending within the housing market to prevent the continuous boom and bust cycles we always get.

As I said before say 4 times is the maximum single borrower limit, someone with no debt, good credit history etc gets the full 4 times income. Someone who earns the same but has lots of debt issues etc simply gets lent less. Where is the flaw in that. The person with no debt still gets lent more than the person with debts.

chucky

shortchanged wrote: »

As I said conrad as far as I'm concerned and it's nothing to do with the newspapers, it's what I would see as sensible lending practice in order to create a more sensible and sustainable housing market in the future.

It's what this country needs. Strict regulation in lending within the housing market to prevent the continuous boom and bust cycles we always get.

As I said before say 4 times is the maximum single borrower limit, someone with no debt, good credit history etc gets the full 4 times income. Someone who earns the same but has lots of debt issues etc simply gets lent less. Where is the flaw in that. The person with no debt still gets lent more than the person with debts.

if you're hoping this will happen, we're already there...

you seem to like to ignore the fact that the average LTV on current mortgages is about 75%.

the average mortgage is just over 3.5 times income.