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UK Government to Underwrite New Mortgage Lending
Comments
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MiserlyMartin wrote: »The trouble is, your idea of prudent sensible lending is what we had up until 2007 - risky, highly irrresponsible & irrational lending. Welcome to the old normal.
What an absurd and ignorant statement.
My idea of normal lending is, in fact, normal lending.
Where a 5% deposit, a good payment history, and a stable job was enough to get you a mortgage without any difficulty, and certainly without the banks expecting a 4% margin above their funding costs.
I was offered a 95% mortgage at around 4 times joint income in 1990.
My parents were offered a 95% mortgage in 1967.
And 100% mortgages were around at least as far back as the early 1980's.
To try and portray such lending as being irresponsible, risky or bubble lending is just absurd.
Unless you think that lending standards from the 1960's, 1970's, 1980's and 1990's were all "risky, highly irrresponsible & irrational lending".....: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 -
So why in 1993 were my partner and I only offered 2.5 times joint income?HAMISH_MCTAVISH wrote: ».
I was offered a 95% mortgage at around 4 times joint income in 1990.
My parents were offered a 95% mortgage in 1967.
And 100% mortgages were around at least as far back as the early 1980's.
".....:cool:
Money in the bank, regular savers and no debt.
Oh yes the housing market had corrected.:T0 -
If houses cost a lot less, then no-one can sell ... and won't sell.
End of that idea, let's be clear - prices cannot fall beyond a mild drop.
Houses are not cars, steel, lampshades ... the market isn't as sure a profit making incentive.
Take an example, builder builds house for £80,000 - Government buys for £100,000 - Government sells to FTB's for £105,000.
Builder builds, builder hires workers, FTB's leave home and buy own home, homebuyers buy goods from shops, shops do well and hire shop workers, Government makes a profit, so does Builder, FTB gets a house to call home.
I know that prices can't fall too far, and I doubt they will - we've gone too far down that road now, but the government should have dampened down the housing market much earlier.
HOWEVER, if the government were to guarentee to buy every house built then every piece of land that's been banked will be built upon by developers. Moreover, if they're being paid a % over the cost price then they'll build very expensive houses indeed. Unless you're suggesting that the government manage the whole process, in which case we might as well just build more council houses (which I think would be a good idea, but one which won't happen)0 -
I know 2 people on my team who have bought in the last 6 months both with joint incomes of 60k Neither had any problems getting mortgage.
I'm not surprised that people with income in the top 20% of households and the ability to save £35,000 can get a mortgage.
Hardly representative for most FTB-s though, is it?Also let's be honest the government are not going to wants to know anyone with an average credit score.
So that excludes the majority of the population then.:cool:
Which is my point.
Banks are cherry picking only the very best, so they can ration limited funds. This means they have to exclude the majority of ordinary families and most of the younger generation.
I rather suspect this scheme, if it goes ahead, will be designed specifically to help the average person, with average income, and average credit scores.
We don't need to help the elite... they can already get a mortgage.;)“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 -
So why in 1993 were my partner and I only offered 2.5 times joint income?
My parents borrowed significantly more than that in the 1960's.
Funnily enough, there is no record of a 1960's housing bubble.: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 -
If houses cost a lot less, then no-one can sell ... and won't sell.
End of that idea, let's be clear - prices cannot fall beyond a mild drop.
Houses are not cars, steel, lampshades ... the market isn't as sure a profit making incentive.
Take an example, builder builds house for £80,000 - Government buys for £100,000 - Government sells to FTB's for £105,000.
Builder builds, builder hires workers, FTB's leave home and buy own home, homebuyers buy goods from shops, shops do well and hire shop workers, Government makes a profit, so does Builder, FTB gets a house to call home.
A house with a build cost of £80k would currently sell for over £200k. Builders would never go for it.0 -
A house with a build cost of £80k would currently sell for over £200k. Builders would never go for it.
Figures were an illustration;)
Mrree
It could be argued that if the builder accepts 20% as the margin is then that is the value of the property or even a bit more as they always go for more than they are worth.
The buyer pays a premium of 5% to enter the scheme.
the buyer is paying a hefty premium for a property that may only be worth £95K.
I know this wouldn't be the story in London but what about the rest of the country?"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 -
HAMISH_MCTAVISH wrote: »What an absurd and ignorant statement.
Where a 5% deposit, a good payment history, and a stable job was enough to get you a mortgage without any difficulty, and certainly without the banks expecting a 4% margin above their funding costs.
I was offered a 95% mortgage at around 4 times joint income in 1990.
My parents were offered a 95% mortgage in 1967.
And 100% mortgages were around at least as far back as the early 1980's.
To try and portray such lending as being irresponsible, risky or bubble lending is just absurd.
:cool:
They were available but they weren't the norm and they often came with a premium rate and MIG, and hefty fees.
In the eighties <90 % was normal mainstream at 3.5 + 3 multipliers plus track record etc. Fees weren't as prevalent.
In the nineties market share was chased and exotic repayments schemes hatched. Fees went up and we started the escalator."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 -
That's because your parents were blackmailing the bank manager, or something. The rest of the world couldn't get mortgages based on joint income.HAMISH_MCTAVISH wrote: »My parents borrowed significantly more than that in the 1960's.
Funnily enough, there is no record of a 1960's housing bubble.:cool:"It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
The rest of the world couldn't get mortgages based on joint income.
Except of course, that's a bit of a myth.
It turns out that by the 1960's things had changed a lot from the 1950's, and you could get a mortgage based on joint income.
Particularly if the woman was a degreed professional such as a teacher/doctor/solicitor or even just a highly trained practitioner such as a nurse.
Entirely at the discretion of the bank of course, but a surprising number did.“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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