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MSE News: Risky mortgages to face new crackdown, George Osborne says

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MSE News: Risky mortgages to face new crackdown, George Osborne says

edited 30 November -1 at 12:00AM in Debate House Prices & the Economy
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Former_MSE_PalomaFormer_MSE_Paloma
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edited 30 November -1 at 12:00AM in Debate House Prices & the Economy
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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  • 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.
  • 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.
  • AndyGuilAndyGuil Forumite
    1.7K posts
    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?
  • ThrugelmirThrugelmir Forumite
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    AndyGuil wrote: »
    Isn't the average below 4 anyway?

    Mortgage lending consistantly sits around the 3.2x level as an average.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
  • GeneraliGenerali
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    Didn't Graham_Devon already post this?
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  • edited 13 June 2014 at 1:03PM
    PincherPincher
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    edited 13 June 2014 at 1:03PM
    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_2Bantex_2 Forumite
    3.3K posts
    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
  • AndyGuilAndyGuil Forumite
    1.7K posts
    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.
  • PincherPincher
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    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.
  • CLAPTONCLAPTON Forumite
    41.9K posts
    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).
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