London increased by 12.4% in 2015

mwpt

wotsthat wrote: »

I feel sorry for people forced to rent because of sensible mortgage lending/ mortgage rationing. It must be galling to be declined for a mortgage based on an arbitrary rate which seems unlikely to be seen any time soon.

I don't know why young potential homeowners were targeted in this way. It's mental because they can fix for a long period at low rates and guarantee they'll never see 7% for years if ever.

I do love how you're trying to swing yourself over as on the side of FTBers now. Fantastic bit of forum-politics.

wotsthat - helping hard working families own homes since, oh, about 8 days ago.

wotsthat

mwpt wrote: »

I do love how you're trying to swing yourself over as on the side of FTBers now. Fantastic bit of forum-politics.

wotsthat - helping hard working families own homes since, oh, about 8 days ago.

Oh dear. That's the third time in a week you've outed yourself as a hypocrite..

1) High London prices are socially destructive - oh I'll buy one anyway - got to be in the game

2) I hate landlords - but I'm thinking about building an extension and sticking some tenants in there - it's OK to be a landlord if you add supply.

3) Look at you playing forum politics you lesser mortal. I'll make the point with....errr... forumonics.

You've made a non-point anyway. I don't think I could be any more clear that I think mortgage rationing has (a) reduced the level of OO's and forced them into renting (b) I'm 'willing' to see lower prices.

Of course I remain morally inferior because in both cases I desire these outcomes for my own self-interest rather than for the children - owners make make better neighbours and I'd like to trade up.

mwpt

wotsthat wrote: »

Oh dear. That's the third time in a week you've outed yourself as a hypocrite..

Ok, let's analyse your claims. I wish you were smarter so I didn't have to do this, but oh well.

1) High London prices are socially destructive - oh I'll buy one anyway - got to be in the game

Post evidence where I said socially destructive. Also, I live in London, I need a house. I can rent at high prices or buy at high prices. The choice to not participate is not open to me. Your argument is stupid, as I've already explained.

2) I hate landlords - but I'm thinking about building an extension and sticking some tenants in there - it's OK to be a landlord if you add supply.

Post evidence where I said I hate landlords. I've continually said I dislike a system which incentivises BTL over OO and puts OO at a disadvantage while increasing house prices. The bit about the extension is just laughable, I've already addressed it.

3) Look at you playing forum politics you lesser mortal. I'll make the point with....errr... forumonics.

Well, my alternative is to try and engage in logical debate with you, and that is pointless.

westernpromise

Graham_Devon wrote: »

I hope you flicked your hair back and claimed "i'm worth it" while writing that!

Suddenly everything is plain sailing and blindingly simple again. What I would do to live in such a world where its jam today, tomorrow and everyday.

We live in the same world, Graham, but the difference is that you're relentlessly negative and I'm not. This outlook tends to produce different outcomes, so while I'm happy with mine, you are not.

carslet

My Grandparents bought a flat in Stockwell in about 1960 for £3000. wonder what it would cost today, I remember them telling me it was about 2.5 his earnings.

wotsthat

mwpt wrote: »

Well, my alternative is to try and engage in logical debate with you, and that is pointless.

Don't know why you bother.

I'm illogical, only averagely intelligent, hypocritical, and allow my actions to be influenced by emotion, bias and subconscious. Apparently I'm being studied for a project because this is unheard of the internet.

westernpromise

wotsthat wrote: »

I feel sorry for people forced to rent because of sensible mortgage lending/ mortgage rationing.

Anecdotally, it's my understanding that this is largely an urban myth.

Lenders are expected by regulators to limit high-multiple loans to a proportion of their book, AIUI. So while they can't lend everyone 6x salary, they can certainly do so for 10 or 15% of applicants. I don't know offhand if this can be more than 15% if a lot of the rest are at lower multiples.

However, now as always they’re going to hand-pick who gets that sort of salary multiple. A single man in his 20s who’s in a profession stands a good chance of getting one because he has no significant structural outgoings such as children or school fees, and as a professional, his earnings are likely to rise rapidly. So to lender and borrower alike, this year’s 6x salary loan is next year’s 5x salary loan, and hence only ever looks less risky as time goes by. In fact, between wage rises and how fast you pay the principal off at 2% versus 14% interest, it’s pretty quickly a 3x salary loan.

Offering 6x salary today is in some ways less risky than offering 3x at 14% interest. In the latter case you as the borrower were going to make no significant inroads into the capital sum for ten or 15 years, so the amount you might default on didn’t really go down for a long, long time. At latter-day rates of 2 or 3% you pay off 15 or 16% of it in the first five years.

The people who can’t get those sort of multiples are older people, or those in lines of work where no significant wage improvement is likely. Then again, if your wages are already maxed out, why would you want to overborrow?

westernpromise

carslet wrote: »

My Grandparents bought a flat in Stockwell in about 1960 for £3000. wonder what it would cost today, I remember them telling me it was about 2.5 his earnings.

It tells you how poor that generation was that it could afford only £3,000 for a place to live.

Of course your grandmother's earnings, if any, would have been taxed at your grandfather's marginal rate, and she received no personal allowance. So her earnings would have been discounted to more or less nothing by mortgage lenders.

wotsthat

westernpromise wrote: »

Anecdotally, it's my understanding that this is largely an urban myth.

I was think more of the requirement people be able to afford a mortgage at 7% interest. At 80% LTV a first time buyer can fix for 10 years with Nationwide at 3.5%.

buglawton

westernpromise wrote: »

It tells you how poor that generation was that it could afford only £3,000 for a place to live.

Of course your grandmother's earnings, if any, would have been taxed at your grandfather's marginal rate, and she received no personal allowance. So her earnings would have been discounted to more or less nothing by mortgage lenders.

Ah but does anyone remember 1969-1990 you used to get INCOME TAX RELIEF (Miras) on your own mortgage in those days. Now there would be a policy to help FTBs today.