Bank of England may put limit on mortgage ratios

Losing_the_way

The strength in the south east is not only supported by migration but the fact that this area of the country is the engine of UK PLC. Thinking that earnings ratios would return to past historical lows is just ignorant. Interest rates are unlikely to move upward by any significant degree within the next few years and even then any real move upward would have to be supported by wage inflation.

vax2002

funny, when you could only borrow 2.5x net pay, houses on average only costed 2.5x net pay !

CRASH_BANG_WALLOP

Conrad wrote: »

They will, and sooner than you think. The new boom is already underway in the South East. You will dismiss this post as it causes you cognitive dissonance.

By 2015 we will be well into growth and the new era of prosperity and people ain't goona stop comming to these shores.

BTW - the UK mortgage market had remarkably low repossesion levels in spite of everything.

dude the South East? :rotfl: the ordinary folks on the street know this part of the uk is so far removed from the rest of the uk. give a better example man
Low levels of repossesions. dude the government and boe are doing everything to stop them. starting with the lowest ir ever doh .conrad my man crazy lending fueled your last boom and its gone and dusted. low ir because the economy is going stale. raise those rates an repos rise

All_Good_Things..

It would make little difference going back to old multiples now as too many people have made a killing (BTL'rs etc) that they would just buy up even more houses. Of course if the old multiples had bee stuck too 12-13 years ago along with proper BTL regulation the housing boom/debt crisis would have been all but averted.

The old argument about 'lack of supply' is just bollox, the reason being over 99% of houses are bought with credit, more so 12+ years ago. Regulate BTL and restrict credit and house prices could have easily been made to follow wage inflation. Unfortunately much like a cross section of people on here, many people are driven by greed, including the 'lawmakers'.

shortchanged_2

RenovationMan wrote: »

What multiple would you recommend?

2.5 times joint and 3.5 times single. The way it always used to be.

The_White_Horse

shortchanged wrote: »

2.5 times joint and 3.5 times single. The way it always used to be.

but why these multiples. why not 2? or 8? or any sum. why those?

GDB2222

MrsRee wrote: »

I really pity you. I don't think I've read any other more pathetic post clutching at straws trying to consign good honest hard working families to trapped negative equity. Pathetic.

Could you kindly quote the post you are commenting on? It helps us fogeys. Thanks.

GDB2222

The_White_Horse wrote: »

but why these multiples. why not 2? or 8? or any sum. why those?

Any multiple is fine by me, as long as it prevents the country going mad again and ploughing all our capital into housing instead of wealth producing assets.

Conrad

shortchanged wrote: »

2.5 times joint and 3.5 times single. The way it always used to be.

Some people, particularly on higher incomes, have a greater level of marginal disposable income, and I've known many borrow 5 times income and manage perfectly well.

Furthermore, people manage thier money differntly, with some spending less on food and holidays as an example, some driving modest cars rather than 4x4's, so any kind of arbitary limit based on lowest common denominator is about as relevant as gas street lighting.

CLAPTON

the banking crisis primarily was caused by securitising very bad lending in the US housing market plus very low capital ratios of the banks
in the UK there was a considerable amount of poor commerial lending
in the UK the amount of domestic mortgage defaults is at the very low level

so I'm not sure how legislation on the mortgage lending market in the UK is going to be much use to prevent the next financial crisis