MSE News: Risky mortgages to face new crackdown, George Osborne says 13 June 2014 at 11:32AM edited 30 November -1 at 12:00AM in Debate House Prices & the Economy 69 replies 664 views

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The Bank of England will be given greater powers to restrict mortgage loans to fix Britain's housing market ...

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Risky mortgages to face new crackdown, George Osborne says



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Conrad

This will not go down well with those struggling to buy in the SE.


An average property in somewhere like Twickenham would require something like 6 x average income.


Another gift for the landlords.


Before anyone says it, the impact on prices will be minor as landlords, wealthy parents and the rest of the already owning class will mop up the property the excluded buyers are denied by lenders.

Conrad

The other effect will be to push buyers into cheaper areas thus forcing up prices there to - this is going to be a key driver for investors wanting to benefit from sudden waves of HPI in the cheaper areas around London for example.

AndyGuil

Conrad wrote: »

This will not go down well with those struggling to buy in the SE.


An average property in somewhere like Twickenham would require something like 6 x average income.


Another gift for the landlords.


Before anyone says it, the impact on prices will be minor as landlords, wealthy parents and the rest of the already owning class will mop up the property the excluded buyers are denied by lenders.

I doubt the people that buy the house require 6x income. Isn't the average below 4 anyway?

Thrugelmir

AndyGuil wrote: »

Isn't the average below 4 anyway?

Mortgage lending consistantly sits around the 3.2x level as an average.

Generali

Didn't Graham_Devon already post this?

Pincher

What about a High Speed 3 Rail link to Cornwall?

Put in a five runway airport near Southampton, to compete with Schiphol. Southampton is good for boarding the cruise ships, and HS3 would make it less than one hour to Waterloo.

Plenty of land out there, nice weather, just need some transport infrastructure. Should be a lot more affordable than London.

Bantex_2

Conrad wrote: »

This will not go down well with those struggling to buy in the SE.


An average property in somewhere like Twickenham would require something like 6 x average income.


Another gift for the landlords.


Before anyone says it, the impact on prices will be minor as landlords, wealthy parents and the rest of the already owning class will mop up the property the excluded buyers are denied by lenders.

Think average price in Twickenham is around £600k

Pretty sure average income isn't £100k

AndyGuil

bantex wrote: »

Think average price in Twickenham is around £600k

Pretty sure average income isn't £100k

I know a few people in Twickenham. A popular area for people that have moved outwards from London after owning a property there. Taking the equity from the previous property and their London salary/salaries a £600k property becomes easily affordable.

Pincher

It's the same old story, if you are not a virgin, no one wants to marry you.

Having excluded the people who can't buy anything at 3.5 multiple, effectively calling them sluts and spoilt goods, no doubt we will call them prostitutes for borrowing at even higher rates, from lenders we will call pimps.

They really have to let go, and allow higher risk loans at higher rates.
and allow the possibility that some of them will hit bad luck and default. You can't nursemaid people forever.

CLAPTON

Pincher wrote: »

It's the same old story, if you are not a virgin, no one wants to marry you.

Having excluded the people who can't buy anything at 3.5 multiple, effectively calling them sluts and spoilt goods, no doubt we will call them prostitutes for borrowing at even higher rates, from lenders we will call pimps.

They really have to let go, and allow higher risk loans at higher rates.
and allow the possibility that some of them will hit bad luck and default. You can't nursemaid people forever.

I'ld be surprise if the BoE cares a damn about a poor chap that has to default.

They are concerned that sufficient people may default to upset the integrity of our banking system and to cause lose of confidence in the economy (falling sales, rising unemployment etc).