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BOE to get more responsibilities.
Comments
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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.
I have to disagree I am afraid. Mortgages are now sales driven rather than risk focused.
I have worked in both sides of this debate both risk and sales.
IMO much more than 3.5 is not sustainable for the average mortgage borrower.
I don't dispute you can build a case by exception for higher multipliers, e.g. a career professional stretching themselves early on. More so when a bonus or pay rides on getting it through.
Much more than 3.5 makes it very difficult to actually "live" rather than just feed the mortgage. When stuff happens in life , problems snowball and the borrower has little room to manouvre.
SE;- I agree that net profits for the taxman don't always reflect underlying income. If you know your customer and can substantiate it fine. There is an argument that if you are too wide of the mark with your accounts then you may also be not telling the truth to your lender either.
Statistics - If you are prepared to take risks with either form of employment by pushing out the money with only limited verification then I am not surprised there isn't much difference in the default rate.
Don't know what they are like now but Interest only were more costly when I did it as the loan was non reducing on the lenders books.
If there is a repayment structure then it is limiting the risk. I accept your point that unstructured, unmonitored repayment vehicles will carry a high risk.
The sales and risk assessment went hand in hand when I started and split. I used to find it quite amusing watching the ploys the sales staff would use to get mortgages through, to get their targets, having done that job.
The emphasis on sales at all costs took off due to competition as each lender tried to stretch the parameters. Short term cross selling and fees overtaking long term serviceability. Once the sale was made it was onto the next one.
The same effect was felt in consumer lending to. I worked in projects to introduce credit scoring for both personal and corporate borrowers. This brought cost advantages to the lender in reducing the number and quality of underwriting resource.
If you are sales focused or desperate to get a mortgage then you will have a different take on this view."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
banks are free to do what they want, they're also free to lend to who they like and how much they like. that's all within financial regulation and also the market demand.
i don't have a problem with 5 x mortgages or 100% mortgages, i have a problem with the quality and level of underwriting. the banks aren't the best at managing this.
This is what I am saying. We NEED more regulation in the banking sector again. Stricter rules on mortgage lending NOT higher house prices and rampant HPI.
It was the deregulation of the banks that got us into this mess in the first place.0 -
you'd have to go pre-1987 if you wanted to look at regulation - it's not going to change too much in too much of a hurry either.shortchanged wrote: »This is what I am saying. We NEED more regulation in the banking sector again. Stricter rules on mortgage lending NOT higher house prices and rampant HPI.
It was the deregulation of the banks that got us into this mess in the first place.
owning your own property is ingrained in the social and economic culture - it won't change any time soon in this generation or the next.0 -
you'd have to go pre-1987 if you wanted to look at regulation - it's not going to change too much in too much of a hurry either.
owning your own property is ingrained in the social and economic culture - it won't change any time soon in this generation or the next.
I'm not suggesting home ownership is wrong it is a core part of the housing mix.
House ownership and the responsibilities that it brings are not for everyone though. There needs to be a mix of options.
Home mortgages should be regulated and controlled to give greater stability to that sector. That should include stricter serviceability criteria IMO.
BLT should be classed as business use and regulated in a differentiated way. Profits that over above that necessary to operate that market should be taxed differently and more heavily. It would not stop all "abuse" but would limit it.
Social Housing should be funded and run alongisde as a service to those who cannot participate in the private options for whatever reason.
there is no reason why lending caps can't be applied to restrict over expansion in the different sectors."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
you'd have to go pre-1987 if you wanted to look at regulation - it's not going to change too much in too much of a hurry either.
owning your own property is ingrained in the social and economic culture - it won't change any time soon in this generation or the next.
I'm not suggesting home ownership is wrong it is a core part of the housing mix.
House ownership and the responsibilities that it brings are not for everyone though. There needs to be a mix of options.
Home mortgages should be regulated and controlled to give greater stability to that sector. That should include stricter serviceability criteria IMO.
BLT should be classed as business use and regulated in a differentiated way. Profits that over above that necessary to operate that market should be taxed differently and more heavily. It would not stop all "abuse" but would limit it.
Social Housing should be funded and run alongisde as a service to those who cannot participate in the private options for whatever reason.
There is no reason why lending caps can't be applied to restrict over expansion in the different sectors."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
you'd have to go pre-1987 if you wanted to look at regulation - it's not going to change too much in too much of a hurry either.
owning your own property is ingrained in the social and economic culture - it won't change any time soon in this generation or the next.
I don't want it to change, I just want people to see it for what it is. Somewhere for people to live, not a cash cow.0 -
i wouldn't be against any of that but i can't see it changing under any government. they've got bigger things to worry about like staying in power and winning the next election...grizzly1911 wrote: »I'm not suggesting home ownership is wrong it is a core part of the housing mix.
House ownership and the responsibilities that it brings are not for everyone though. There needs to be a mix of options.
Home mortgages should be regulated and controlled to give greater stability to that sector. That should include stricter serviceability criteria IMO.
BLT should be classed as business use and regulated in a differentiated way. Profits that over above that necessary to operate that market should be taxed differently and more heavily. It would not stop all "abuse" but would limit it.
Social Housing should be funded and run alongisde as a service to those who cannot participate in the private options for whatever reason.
There is no reason why lending caps can't be applied to restrict over expansion in the different sectors.0 -
i wouldn't be against any of that but i can't see it changing under any government. they've got bigger things to worry about like staying in power and winning the next election...
I agree with you.
Interesting that the current lot have opened up so many battle fronts that they are leaving themselves so exposed really.
It would be nice if they concentrated on the real issues as a country.
As acountry we don't make any "sales" and therefore we don't raise the "tax" on them. Doesn't really make much difference what the tax rate is or the cost of production if you are not selling either the things people want or not at all.:o"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
unfortunately this lot will be as bad as the last lot and the same people that hammer the previous government and politicians will probably do a complete about turn and start hammering them soon.grizzly1911 wrote: »I agree with you.
Interesting that the current lot have opened up so many battle fronts that they are leaving themselves so exposed really.
It would be nice if they concentrated on the real issues as a country.
As acountry we don't make any "sales" and therefore we don't raise the "tax" on them. Doesn't really make much difference what the tax rate is or the cost of production if you are not selling either the things people want or not at all.:o
people just can't see it.0 -
Very good point.grizzly1911 wrote: »How do they find billions (£5bn a year for Afghan I have seen reported) into fighting wars for the last 9 years achieving very little.
I'm not a fan of going to war in Afgan / Iraq etc
The excuses we hear is that it's to fight terrorism and protect the homeland.
The thing is, arguably it puts the homeland at greater risk i.e. the London Bombing, because we have went to war.
We'll this is an investment they expect to see a bigger return over the long term.grizzly1911 wrote: »Or perhaps how they find the money to prop up Greece and Ireland at the drop of hat.grizzly1911 wrote: »At least they would get a return on their outlay over the life of the property.
Ah, but they would only get a return over the life of the property should they sell, you sell the reasons for property investment so well
:wall:
What we've got here is....... failure to communicate.
Some men you just can't reach.
:wall:0
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