Bank of England may put limit on mortgage ratios

Conrad

CLAPTON wrote: »

the banking crisis primarily was caused by securitising very bad leaning in the US housing market plus very low capital ratios of the banks
in the UK there was a considerable amount of poor commerial leaning
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 leaning market in the UK is going to be much use to prevent the next financial crisis

People conflate thier desire for lower prices with a vague notion the retail mortgage market was disordered.
Whilst I might agree 125% mortgages were too risky, things like self certified income mortgages have lower arrears and deliquency levels compared with standard documented mortgages.

The bigger picture is that a tiny proportion of homeowners end up repossessed, so despite all the angst and writhing over income multiples, overall we have a pretty well run marketplace.

In any event I can report that 5 x income and effective self cert (fast tracking) is still in commonplace.

Regulation seems to be detrimenting the wrong people in large part, for example a late 50 something wanting a 25 year mortgage following divorce.

StevieJ

CLAPTON wrote: »

the banking crisis primarily was caused by securitising very bad leaning in the US housing market plus very low capital ratios of the banks
in the UK there was a considerable amount of poor commerial leaning
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 leaning market in the UK is going to be much use to prevent the next financial crisis

To pararphrase Oscar, one leaning is misfortune, two leanings looks like carelessness and three leanings maybe sort your keyboard out

CLAPTON

StevieJ wrote: »

To pararphrase Oscar, one leaning is misfortune, two leanings looks like carelessness and three leanings maybe sort your keyboard out

but very consistent?

and about as relevant as the proposed BoE action if a bit more amusing.

ukcarper

vax2002 wrote: »

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

when was that exactly

GDB2222

ukcarper wrote: »

when was that exactly

It was 3x and it was as recently as 30 years ago.

ader42

GDB2222 wrote: »

It was 3x and it was as recently as 30 years ago.

Even more recently when I first bought in 1990

ukcarper

GDB2222 wrote: »

It was 3x and it was as recently as 30 years ago.

To be fair Vax2002 never said what earnings but the lowest they have been according to Halifax is just under 3x in the mid 90s in 1982 they were about 3.2x now they are 4.3x but the figure they use is male full time earning gross.

ukcarper

ader42 wrote: »

Even more recently when I first bought in 1990

In 1990 they were 4x

ukcarper

In 1999 according to both Nationwide and Halifax earning to average house price graphs although not at there lowest prices had only been lower for a few years in the mid 90s and early 60s

In 1999 average house price Land Registry £72k,
Average wage (mean) £17.7k ONS

RenovationMan

shortchanged wrote: »

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

Always? How far back are you going for 'always'? I'm assuming that you know that serfs didn't own homes so could you supply a link showing historical mortageg multiples since the time you think 'always' started and today?

While I wait for the link to appear (you seem so convinced of these multiples that I'm sure you have the information to hand) can I also ask the question of whether you believe that someone who has a 2.5 x salary multiple mortgage and a car loan, substantial credit card debts and a high maintenance lifestyle is as secure a borrower as someone with a 4x salary multiple with no debts and is a bit of a homebird who just wants a nice house and gardens for his family?

In essence, do you really believe that mortgage multiples alone are any sort of proof that someone is a good lending risk and can actually afford to service the loan?