MSE News: 'Dear Chancellor, don't cap mortgage lending'

brit1234

Ray Boulger has always had a vested interest in high house prices, I wonder how many properties he has in his portfolio. He has spouted rubbish like this for 10 years now.

He is constantly talking up the market on the BBC. :mad:

Cassandra_W

People should be freed and refuse joint income mortgages.

In 1998 mortgages were typically 3 times main income plus one times second.
Average wage was £17k, count £9k for second income = 3 x £17k plus 1 x £9k = £60k
The average house was £60k.

Since then banks and mortgage brokers have persuaded people to take on more debt because lending makes them more profit.

Banks want people to do 4 times joint income mortgages.
Average wage is £25k count £15k for second income = 4 x £40k = £160k.
Average house is £160k

Applying the old 3 times main plus 1 times second income to wages today house prices should be 3 x £25k plus 1 x £15k = £90k.
£160k is a 77.7% increase on the £90k. Deliberately caused by banks and mortgage brokers.

At the average mortage rate of 6% over 25 years people pay 92p in interest per pound borrowed.
Mortgage payments on £60k were £386 a month. Mortgage payments on £160k are £1,030 a month.
The mortgage payment has gone up 167% while the two wages combined have gone up just 54% from £26k to £40k. This is called debt slavery.

If people want affordable housing. If people want their children to have affordable housing. There is only one thing they have to do to force house prices to correct to historical salary multiples:
Do not borrow more than 3 times main income plus 1 times second income, no matter how much your bank or mortgage broker tries to persuade you otherwise because they want you to have to pay more mortgage interest. Any mortgage must only be for a whole house, avoiding shared equity and any other ponzi schemes instigated by banks, mortgage brokers and builders.

Cassandra_W

Google these articles about property "experts"

2010 about mortgage brokers John Charcol

Towergate Financial bought John Charcol last night after it went into administration.

2009 Garrington

Property expert Phil Spencer's homefinding business has finally gone bust.

I suspect there are plenty more.

When_is_the_reset?

It is obviously a smart idea to listen to financial advice from a company that has vested interests and seems to have already more-or-less gone bust recently.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/7301221/John-Charcol-saved-by-pre-pack-adminstration.html

I despair of the lowly quality of so-called journalism and 'expertise'.

Edit - Cassandra beat me to it!

Caveat_Mortgagor

"Let the fools continue to borrow insane amounts" insists man paid a percentage of the amount they borrow.

Interesting that MSE tweeted a link to this story describing Ray Boulger as a 'mortgage guru'. The innocent ftb might associate the word 'guru' with expert, analyst or someone with specialist knowledge.

They might not instantly think, the more I borrow, the more the guru earns.

They might not think that his industry spends millions on lobbyists to influence govt policy in the best interests of big business, in direct contrast with whats best for the man on the street.

But like I say, its interesting that the consumer champions at MSE take this stance!

gingeralan

DVardysShadow wrote: »

The idea has unintended consequences written all over it.

Once demand picks up and we hit a seller's market, people will realise that the only way they can buy a house is if their gross salary rises. Watch out for substantial pay demands hitting the economy.

Would you rather people live on wages that are too low yet able toborrow excessive amounts to afford a house that is too much for them to realistically afford?