Nanny bans mortgages of more than 3 x income

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I thought that until I went into an estate agents last week.

You can buy a house in expensive Scarborough for 75,000 when 12 months ago you couldn't get anything for less than 100,000.

Exactly! And to the amusement of those who pointed out the tulip bubble, only to be told that it wasn't a bubble because tulips are actually useful and that there are real underlying reasons for the increase in demand for tulips...

So's property.

"There's a hole in my bucket"

What do you want them to do?

Buy gold?

How can people sell if there is going to be a shortfall? The only hope people in negative equity have is to wait for prices to pick up again, and now they will have to wait a darn sight longer. I presume that neg equity schemes are now off the menu since they amount to a 100% mortgage? The government is interfering heavily in market forces and will cause hundreds of thousands of people years, or even decades of pain. If the prices were too high, they would have corrected at a natural pace in a natural time, to a realistic level.

Different issue (I think it has been included). Yes, a deposit is sensible, as long as people don't get an (expensive) loan to fund the deposit rather than paying it at a lower rate over the term of the mortgage.

Sorry that should say 100%+ mortgage

> FSA-to-cap-mortgage-borrowing.html >>> So is nanny going to cap the average house price also? An average salary >>> (£20k?) won't get you much, even with the crunch... >> All speculative bubbles burst. Much to the relief of people who buy >> tulip bulbs to grow tulips. >

Do we know that there isn't? Houses aren't selling because people can't get loans...how can we tell what a realistic price for a house is anymore? Certainly the number of estate agent's inquiries vastly outnumbers the number of mortgages being granted.

> > FSA-to-cap-mortgage-borrowing.html > >>> So is nanny going to cap the average house price also? An average salary > >>> (20k?) won't get you much, even with the crunch... > >> All speculative bubbles burst. Much to the relief of people who buy > >> tulip bulbs to grow tulips. > >

People can get loans, they just need a sensible deposit.

By what they sell for. House prices were always heavily dependant on what lenders will agree to lend.

As always, no doubt. It's like the stat quoted recently that there are 10 applicatnts for every job. Erm, yes, so what? The average applicant probably applies for 10 jobs.

'William Black' wrote this:

Increase savers interest rates so that people who save for a deposit will have an incentive.

The price has shot thru the roof since Brown sold ours.

I assume you bought some if it was such an obvious mistake...

In which case you're doing ok.

The gains are neither taxable nor declarable in the UK.

>> FSA-to-cap-mortgage-borrowing.html >>>> So is nanny going to cap the average house price also? An average salary >>>> (20k?) won't get you much, even with the crunch... >>> All speculative bubbles burst. Much to the relief of people who buy >>> tulip bulbs to grow tulips. >>

A realistic price for a house is what they would cost if people bought them to live in rather than as an investment. Which by a strange coincidence is roughly the 3x annual salary starting price they historically were.

It'll get you f*ck all. Never mind - at least the wealthy people will still be able to buy their second/third/eighth home.

>>>>>

Two gardens, three bedrooms; attractive driveway; this house is packed with stunning features and is a bargain for 29,950

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Lovely! For 'substantial refurbishment' read giant retention - whoever buys that is going to need a £20k deposit!

I assume you bought some.

In which case you're ok.

After all, it was obvious, wasn't it...

>>>>>

A couple of points -

1) average income earners have traditionally expected something better than a bottom-rung hovel - they will have to lower their sights considerably since we are talking about average income needed to purchase said hovel now. 2) Looking at Scarborough on Rightmove suggests that anything for £70k is going to need considerably refurb. so they are going to need 3 x their income, a £15k cash deposit and another £5-10k cash for retention until the works are completed, cash for the works, and cash for the legal expenses. This move is even going to put these hovels out of the reach of most people... 3) OTOH many 'average' income people may head over to our lovely Viccy terraces, and do what they did in St Albans - turn a £70k hovel into a desirable £400k pied-a-terre in a conservation area. Bring it on then I can get the f out of here to a place where we don't have to rummage through dustbins for our dinner.

Here is a house in the street I grew up in, a few doors away from ours - read it and weep. (this one is only a two bed - ours was three, so it was 'worth' a lot more).

I posted 'buy gold!' a dozen times over the past few years. I was mostly dismissed!

'DVH' wrote this:

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IOW it's like a tip inside and everything's smashed to bits.

>

Surely until recently, the banks were only prepared to lend those sorts of quantities anyhow. I'm not sure I'm at all keen on where the 'borrow-all-you-like' philosophy has led us. The point you make regarding '20k', really only further underlines just how far out of kilter with earnings, the real-estate market has become and that it could probably do with correcting a further 40-50%.

I'm not sure however, that legislation is entirely necessary in this instance, as banks will almost certainly return to those sorts of lending practises, irrespective of external intervention.

A further 'however' is of course that history is one of the most useless subjects on the face of the planet; we simply don't learn from it. So without legislation, we'll probably be repeating this 'hyper-inflationary', speculative real-estate bubble in 20 years or so.. followed by yet another crash/recession.. as the next generation of city spivs and confidence tricksters, deny the inescapable gravity of the already learned lessons of 'yester-year'