Sunday, Feb 11, 2007
Weeks news in focus
Firstrung: First time buyers, the week's property news in focus - Firstrung
Our view still remains that increased interest rates will help FTBs as house prices will stop accelerating and hopefully fall back in line with sensible multiples- although 3.5 X single salary (for entry level housing) will begin to be looked upon as a relic of the past. We know FTB business is wanted by lenders therefore the rates will stay attractive in this sector and continue to be heavily subsidised, by current borrowers having interest only mortgages - BTL in particular.
Posted by converted lurker @ 01:25 PM (141 views) Add Comment
2 Comments
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1. japanese uncle said...
In a high tax rate regime such as the UK, as opposed to the US or Japan where income tax rate is considerably lower, 3.5 x income multiple must still be a challenge for many households, single or multi-income, if this refers to gross income. You have to use net income instead.
2. Nohpc said...
Rubbish japanese uncle. 3.5% income multiple is not a challenge at all. If you have a flexible mortgage and can switch between the minimum interest only payment plus as much overpayment as you want affordability is even easier at this level.
You also forget that although the UK is high tax we do not pay for things such as basic health care which the US public pay HEAVILY for. And we are talking big money here. Also if you think 3000 pounds a year is expensive for a uni education you should check out the US fees. The average med student there graduates with 120 thousand dollars of debt.