Twenty years on – the winners and losers of Britain’s property boom

cells

HornetSaver wrote: »

And therein lies the problem. Prices are already too high for the median earner to get a mortgage at 4-4.5 times salary. Renters cannot get onto the mortgage ladder due to the multiple rule, and therefore have to pay even more than they would be paying if they had a mortgage, to rent. That situation is fine if average prices are say, 5-6 times median earnings, and a responsible saver can get themselves into a position where they can get a large enough deposit together to get mortgage within a reasonable period of time (obviously undoubtedly far longer than they would have hoped, but nonetheless it's acheiveable). It's not fine where prices are 8-9 times median earnings and the need to provide for a family limits your ability to cut back on expenditures such as housing and transport.

well yes salary multiples are one such way mortgages are rationed and they need to be replaced with something else

one idea is to underwrite property on rental achievable rather than on the borrowers income with security provided by say a 20% deposit.

mwpt

cells wrote: »

Your argument that people are choosing to rent because prices are too high in the south also makes no sense s a mortgage is cheaper than to rent even in the south.

Maybe on rates that are at 2% instead of 7%. Test the prices again at 7% and tell me how much cheaper mortgage repayments are than rent.

The reality is that mortgages are rationed

I will await some statistics on mortgage rationing that shows a significant number of people wanting to buy a house within historic lending multiples being denied mortgages. If you can show these to me we will accept this and move on to your other arguments. At the moment you are taking this as a given as the premise for all the rest of your arguments.

I've been waiting a while.

cells

HornetSaver wrote: »

And therein lies the problem. Prices are already too high for the median earner to get a mortgage at 4-4.5 times salary.

Only really true in London and a few other places. Half the country is well within 4-4.5 x salary. Some towns and cities are closer to 2-3 x salary

London has become unaffordable because renters outbid owners.
4 working renters will always outbid 1-2 would be owners and it just makes logical sense that inner London houses the young workers at higher densities and outer London or the commuter towns house the family with 1-2 workers.

One potential way to address the London problem is to decrease the size of the social stock. It is higher than the national average. 250,000 social homes in London should be sold off (then London would have the same percent of social as the rest of england) and the vacated tenants (pensioners and unemployed) should be moved outside of London. That would reduce London rents and prices relative to what they otherwise would be. Probably the scope to sell off 500,000 social homes in London not just 250,000

cells

mwpt wrote: »

Maybe on rates that are at 2% instead of 7%. Test the prices again at 7% and tell me how much cheaper mortgage repayments are than rent.



I will await some statistics on mortgage rationing that shows a significant number of people wanting to buy a house within historic lending multiples being denied mortgages. If you can show these to me we will accept this and move on to your other arguments. At the moment you are taking this as a given as the premise for all the rest of your arguments.

I've been waiting a while.

I dont think there is data on mortgage rationing because its hard to record things like going to a broker and them saying 'no chance mate' and waking away to renew your rental agreement. its even harder to record people who look up the criteria and informaiton on the web and conclude that they have no chance so dont bother to apply as it would be a waste of their time

I do know of one person who has about a 60% deposit and was made redundant recently but started his own business. Even with 60% deposit and only needing to borrow some £50k which would have resulted in a repayment mortgage of about £200 a month. Instead computer said no and will continue to say no for at least 3 more years and he is paying £600 a month rent

Thanks to the regulator and the views of people like you, he and his family is going to be down at least £15k in not being able to buy


also simply, what moral right do you or the government have to say no self cert mortgages and no IO mortgages if 1 the borrower want it and 2 the bank wants to give it on terms that they are happy with? your saving them from themselves? my hero... only that you condemn families to pay more rent than they would on their self cert mortgages

HENRY78

Has there ever been a more despised industry? Estate Agents have always taken this crown. But the BTL brigade have taken this to a whole new level.

mwpt

cells wrote: »

I do know of one person who has about a 60% deposit and was made redundant recently but started his own business. Even with 60% deposit and only needing to borrow some £50k which would have resulted in a repayment mortgage of about £200 a month. Instead computer said no and will continue to say no for at least 3 more years and he is paying £600 a month rent

Thanks to the regulator and the views of people like you, he and his family is going to be down at least £15k in not being able to buy

I'm happy enough to discuss cases like this and I am not sure I buy your anecdote. I've heard of contractors obtaining mortgages after being a contractor for just 6 months. If there is a lender willing to lend to people like this at safe rates and LTVs I don't have anything against that.

But I'm not willing to just let you get away with saying mortgage rationing is the reason for the housing crisis, with no proof.

also simply, what moral right do you or the government have to say no self cert mortgages and no IO mortgages if 1 the borrower want it and 2 the bank wants to give it on terms that they are happy with? your saving them from themselves? my hero... only that you condemn families to pay more rent than they would on their self cert mortgages

I have every moral right since I as a tax payer effectively own the banks. If you are happy to put your money into an institution which lends to self cert mortgages and does so ring fenced from the rest of us, go for it.

cells

mwpt wrote: »

I have every moral right since I as a tax payer effectively own the banks. If you are happy to put your money into an institution which lends to self cert mortgages and does so ring fenced from the rest of us, go for it.

you dont own the banks nor doess the government in your name, the government owns a portion of a few banks so fine they can stay out of self cert but what right do you have to force the other banks to go along with this folly

westernpromise

In 2014 when I was redoing my mortgage, my broker told me that I could borrow X where X was over 5 times my salary. I asked how this was possible post-MMR and he said that lenders could still advance high multiples, but no more than a certain proportion of their loan book could be at those high multiples.

I'm not sure where in MMR that stricture is embedded, but it is a required practice now.

So to the extent that you could lend everybody 5x salary in 2007 but now you can only lend 10% of your customers that much, credit supply is certainly shrinking.

redux

thequant wrote: »

Homeowners in south London have hit out after being told to pay up to £14,000 to fix damp and leaks — before their houses are demolished.

Lambeth council plans to knock down Cressingham Gardens, where about 1,000 people live in 306 homes, as part of a £100 million regeneration.

Homeowners claim the estate, near Brixton, has suffered years of neglect by the council. The Labour-run local authority’s cabinet has voted to press ahead with replacing all existing houses and flats, and adding 158 new ones.

http://www.standard.co.uk/news/london/homeowners-told-to-pay-14000-for-repairs-on-condemned-estate-10417920.html

Rather than quoting hearsay and accusing other people of not knowing their facts, any chance you could back up your own ?

It seems I must repeat what I said.

redux wrote: »

I said the example I was thinking of, with the compulsory purchase at 175k and the new flats cost over £400k, with £10,000 repair fees only 8 months ahead of demolition, is in a Conservative controlled council.

Apparently you don't know where this is, or you would not falsely impute that I was lying.

Edit: one place I did actually name was Poole. This is not a Labour area either.

Let's try and untangle what happened.

I gave an example. I didn't specify where it was, or which party was in control of the council.

I was asked, and I said a Conservative council in Greater London.

Any socialist councils, was the next question, and I said clearly enough that I did not know.

Then you joined in and said you knew where I was talking about, and they are all Labour councils. Maybe you used capital letters for the word all.

So I said I didn't know about everywhere, this was just one example, and you claimed to know where it was, thus your declaration that I am talking about a Labour council was tantamount to accusing me of lying.

Why instead didn't you just answer the question differently, with no disagreement, that you don't know where my example was, but you happened to know these or closely related issues had also occurred in a Labour council area.

But no, now you mention a different scheme somewhere else, and use that to accuse me of ignorance and hearsay.

Seeing as we are talking about completely different places, the facts are not mutually exclusive.

The only falsities in any of this are your assumption you knew where I meant, and your assertion that these are all Labour controlled councils.

Just an extra point though.

The TV report I saw a while ago, and coincidentally rewatched on Youtube only this weekend, didn't make any mention any political parties.

I really didn't intend to turn this dilemma of redevelopment cost gap into a partisan issue about political parties, mainly as I had no idea it might be with respect to certain points. (It's true I did discuss Osborne's Help to Buy subsidies, but even this doesn't have to be as politically one-sided.)

I gave one redevelopment scheme example and at the time didn't actually know whether this was a Labour or Conservative area, so I had to look this up after I was asked on here. You may dislike the answer, but your argument doesn't make what I said wrong.

I respectfully remind you I said I didn't think any political party was getting these things right. That isn't a partisan declaration.

mwpt

cells wrote: »

you dont own the banks nor doess the government in your name, the government owns a portion of a few banks so fine they can stay out of self cert but what right do you have to force the other banks to go along with this folly

The FCA, for all the good it does us, is there for a reason. I'd be happy enough with a privately funded institution with no access to FLS or other such government back lending schemes, to lend to self cert mortgages. Pile in if you want. (EDIT: I am also ok with safe lending to self cert, say 25% deposit and higher interest rates)

But until you show proof of mortgage rationing in the sense that it should be described (ie. vs historical norms) then I'll take the argument that high house prices are actually caused by lack of credit instead of because of easy credit, with a pinch of salt.

I mean, if it sounds absurd, smells absurd, it almost certainly is a turd.