Just to Make Things Completely Clear

Filo25

wotsthat wrote: »

If the numbers aren't that significant then there can't be that many, still to be defined, highly leveraged landlords about and any increase in OO's will be insignificant too.

I do wonder if the recent upsurge in sales of BTL's was, in fact, the 'worst of' the over leveraged landlords selling to less leveraged entrants. Good news for tenants - bad news for the exchequer.

Not sure what its like elsewhere in London or if it more noted in some of the more BTL heavy areas, but around where I live, I wouldn't say I have seen a huge uptick in properties coming to market, still pretty thin, as it has been for a while.

There may be a change in the makeup of buyers but on such volumes the impact is likely to be limited

Generali

cells wrote: »

who is talking about fraud and why does it have to be risky and why do we need internet addicts to decide that all banks need blanket policy?

I know one individual who lost their job, started self employment and moved towns. He has about 50-60% down but is turned away as he has yet to build up the 2-3 year accounts which take more than 2-3 years as your first accounts are done for more than a year after you start trading.

In which world do you think a bank offering him a 50% LTV mortgage on a self cert mortgage that just allows him to tick a box saying 'I can service this debt' would be risky or wrong?

Instead of being an owner paying a mortgage interest of some £150 per month he is now a renter paying £650 a month. Even if he can sort himself out over the next 3 years on the accounts side for him and his family that is a very significant £20k loss in paying more rent than mortgage interest all thanks to the over-reactionists we are saving the world from itself...


20% down self cert needs a return. Not the fake payslip type the type you just tick a box saying im an adult I can make the payments and if I cant you have my 20%

Great you know a bloke who has some savings and a business that he's full of chat about. It's definitely worth basing a financial system on your experience of some bloke who may or may not be full of it in your opinion. Thankfully wiser heads will prevail.

Did you sleep through 2008?

Cakeguts

Have a go at this. I have recently been told that you can rent a 2 bed council house in a town in the Northwest for £400 a month. You can actually rent privately a 2 bed house for less than £400 a month. There is no shortage of council properties. The private rental market is booming. Lots and lots of people want to rent privately. For the rent that some people are prepared to pay which is more than a council house you could easily buy a house on a mortgage. Yet many people are choosing to rent.

wotsthat

Filo25 wrote: »

Not sure what its like elsewhere in London or if it more noted in some of the more BTL heavy areas, but around where I live, I wouldn't say I have seen a huge uptick in properties coming to market, still pretty thin, as it has been for a while.

There may be a change in the makeup of buyers but on such volumes the impact is likely to be limited

I don't know what volumes have been but even accounting for journalistic license there seems to be a consensus of a rush to beat the April stamp duty deadline and we're, apparently, now seeing a rush to let.

If that's the case then the additional stamp duty might have been a godsend for our so-called highly leveraged landlords in exiting the market. Time will tell whether the buyers are just greater fools.

cells

Generali wrote: »

Great you know a bloke who has some savings and a business that he's full of chat about. It's definitely worth basing a financial system on your experience of some bloke who may or may not be full of it in your opinion. Thankfully wiser heads will prevail.

Did you sleep through 2008?

Its not one person I think 5-10% of households can be owners with self cert but cant without. That is upto 3 million homes who are forced to pay more for rent than they would in interest

So you think self cert should not be permitted in any circumstances even if someone is putting 90% down? worse that that you think we should have an overriding say in it?

Actually Ive changed my mind, you are right, what was I thinking. The UK should have regulations in place decided in a period of overreaction so much so that all banks offer the same product to the same set customers at the same price and we can call this free market competition

Generali

cells wrote: »

So you think self cert should not be permitted in any circumstances even if someone is putting 90% down? worse that that you think we should have an overriding say in it?

I would suggest you need to get rid of credit cards, pay day loans, unsecured borrowing, maybe even IOUs between friends and families well before you consider self cert with high deposits a risk or risky

its not just one guy, I think its possibly upto 10% of all households (About 3 million households) which may only be able to buy with self cert

clearly the regs and regulations were an over-reaction. Just look at what happened to older borrowers computer says no thanks to the overreaction. However that is being rolled back because the people in power are old and want mortgages and banks said no regulations wont let us lend to you.

No I was not asleep in the recession. The recession was not caused by uk lending. There is no risk in higher deposit self cert repayment mortgages

There's a reason you can get a mortgage at base rate + 2 or 3% whereas a credit card is many multiples of that.

Interest rate spreads represent risk. If I can't calculate my risk I can't judge the spread I should be charging.

You can throw around made up numbers all day, goodness only knows you love to invent a bunch of numbers, but the fact is that banks make decisions based on risk and if they can't judge the risk they can't lend.

cells

Generali wrote: »

There's a reason you can get a mortgage at base rate + 2 or 3% whereas a credit card is many multiples of that.

Interest rate spreads represent risk. If I can't calculate my risk I can't judge the spread I should be charging.

You can throw around made up numbers all day, goodness only knows you love to invent a bunch of numbers, but the fact is that banks make decisions based on risk and if they can't judge the risk they can't lend.

If it were the banks saying no then there is nothing anyone can or should do about it. If its the regulators saying to the banks this is impossible to price so no no no then its not really something the regulator should be doing.

Right now the situation is silly. A first time buyer on a non secure job contract can get a 5% down mortgage while a person who say inherits £100k and wants to buy a £150k house can not get a mortgage if they dont meet the normal criteria. The latter on a self cert is a much less risk as the bank only takes a loss if there is a two thirds or more house price crash an impossibility

antrobus

cells wrote: »

So you think self cert should not be permitted in any circumstances even if someone is putting 90% down? worse that that you think we should have an overriding say in it?....

Self-certification simply means that the lender does not seek to verify income. I can't see that confers any advantage to a would be borrower other than the ability to lie about their income.

cells

never mind its clear the feeling towards self cert is too anti for their return. The 5-10% of households that could buy with those products will just have to rent instead of owning and we will see this in the fact that cheap areas like the NE have seen prices fall and ownership fall at the same time over the last 5-10 years.

They will be a good deal poorer, their landlords marginally richer, the world will go on, people will continue to cry the poor stay poor and completely ignore the part over regulations play in it

Generali

cells wrote: »

If it were the banks saying no then there is nothing anyone can or should do about it. If its the regulators saying to the banks this is impossible to price so no no no then its not really something the regulator should be doing.

Right now the situation is silly. A first time buyer on a non secure job contract can get a 5% down mortgage while a person who say inherits £100k and wants to buy a £150k house can not get a mortgage if they dont meet the normal criteria. The latter on a self cert is a much less risk as the bank only takes a loss if there is a two thirds or more house price crash an impossibility

Bank owners don't like default rates to rise. Also repos are expensive to deal with and a PITA. Default is in itself a risk.