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Multiples Sneaking Up?

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Has anyone else noticed this?

On moneysupermarket.com that on the 90% mortgages the multiples of combined earnings that lenders are advertising are sneaking up.

I managed to find a few lenders (RBS, Direct Line, First Active - DL and First Active both subs of RBS I think) on there who appear to be advertising as much as 4.8x combined. Couldn't get anywhere near this a month or so ago when I last tried it

I know that what you see on the comparison sites doesn't necessarily translate into exactly what is out there, but this seems to be evidence of state owned banks returning to normal/insane levels again.

Very worrying

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Has anyone else noticed this?

On moneysupermarket.com that on the 90% mortgages the multiples of combined earnings that lenders are advertising are sneaking up.

I managed to find a few lenders (RBS, Direct Line, First Active - DL and First Active both subs of RBS I think) on there who appear to be advertising as much as 4.8x combined. Couldn't get anywhere near this a month or so ago when I last tried it

I know that what you see on the comparison sites doesn't necessarily translate into exactly what is out there, but this seems to be evidence of state owned banks returning to normal/insane levels again.

Very worrying

I was offered 5x by Woolwich in the spring. This was even before the green shoots nonsense.

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Has anyone else noticed this?

On moneysupermarket.com that on the 90% mortgages the multiples of combined earnings that lenders are advertising are sneaking up.

I managed to find a few lenders (RBS, Direct Line, First Active - DL and First Active both subs of RBS I think) on there who appear to be advertising as much as 4.8x combined. Couldn't get anywhere near this a month or so ago when I last tried it

I know that what you see on the comparison sites doesn't necessarily translate into exactly what is out there, but this seems to be evidence of state owned banks returning to normal/insane levels again.

Very worrying

This is now the definition of insanity. Labour state controlled banks directing the banks to resume lending at silly multiples so that Laour can win an election. In addition Labour policy to stop banks from repossessing.

We are witnessing the muther or all frauds. Perpetrated by the Labour party on its own citizens for party political purposes.

Tories, Lib Dems - where are you!!!!!!!!!!!!!!!!!!!!!! And why the F are you not doing something about it????

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Guest DissipatedYouthIsValuable
There needs to be a damn law put in place.

If it kicks off again, I'm starting an Estate Agency.

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Looks like Q1 was just a live cat fall.

Just an indication of what is to come.

THey've postponed it, at the cost of making it 5 times worse.

But hey, at least we can blame the Tories then! Country ruined, but politically we won the long war. Success! :angry: :angry:

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There needs to be a damn law put in place.

Serious question... why shouldn't 5x mortgages be allowed?

It might be a good move in some cases.

Assume you can get a 10 year fix at 4.99% which is/was possible with a 20% deposit, play with some numbers for yourself:

Example:

http://www.drcalculator.com/mortgage/

Someone on £20k per year could borrow £100K, with monthly repayments of £584

I don't think this should be considered reckless, nor requiring legislation.

Of course, you need the deposit, and you need a good fixed term, but should it be made illegal?

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6.89%, arrangement fee £999

Not cheap then.

It's all about headlines and proving they have deals on offer. I would suspect that if your on £13k a year the bank will find some reason it won't lend you the money to buy your dream first home.

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Looks like Q1 was just a live cat fall.

Just an indication of what is to come.

THey've postponed it, at the cost of making it 5 times worse.

But hey, at least we can blame the Tories then! Country ruined, but politically we won the long war. Success! :angry: :angry:

I am starting to feel that it will really be that bad. I didn't think Labour were that evil or/and clever enough. But with Mandy on board....

You know, he wants out of the Lords so he can succeed Cameron as the next PM.

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Serious question... why shouldn't 5x mortgages be allowed?

It might be a good move in some cases.

Assume you can get a 10 year fix at 4.99% which is/was possible with a 20% deposit, play with some numbers for yourself:

Example:

http://www.drcalculator.com/mortgage/

Someone on £20k per year could borrow £100K, with monthly repayments of £584

I don't think this should be considered reckless, nor requiring legislation.

Of course, you need the deposit, and you need a good fixed term, but should it be made illegal?

Won't be open to those on a low wage.

I agree that on a certain level this makes sense, if you have a long period of growth. If I had really stretched the budget when I first bought in 2000 I would have a far smaller mortgage now and may not have had to move later in the decade.

The first several years would have been a real struggle but as our wages slowly went up and the amount owed went down there is a certain logic to this.

Providing there isn't a crash at the beginning of the 10 year period and you remain in employment this works.

However get this wrong and you'll be struggling for years getting out of the mess.

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Yep, according the council of mortgage lenders multiples are sneaking up:

"Income multiples have also started to increase modestly, with the typical first-time buyer borrowing 3.08 times their income, compared to 3.04 in May, and home movers typically borrowing 2.76, compared with 2.74 in May."

http://www.cml.org.uk/cml/media/press/2354

thats right the averge loan in may was 127K makes the yer average loan for FTBs £41237 or your average movers income £46204

you gotta love the stats boys. only those on the top 5% of incomes are moving...or the figues are hiding something

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Looks like Q1 was just a live cat fall.

Just an indication of what is to come.

THey've postponed it, at the cost of making it 5 times worse.

But hey, at least we can blame the Tories then! Country ruined, but politically we won the long war. Success! :angry: :angry:

im sorry, but what does anyone expect in a bounce? prices to carry on down??

lucky for me, im not interested in buying a place. desperation and FEAR are not in my daily life.

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With regards to multiples high multiples may be fine for people that do not have children. As soon as couples with children start applying for mortgages then the multiples should be a lot lower 2.5x to 3.5x.

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For me this reinforces what I argued, to some extent, in the early days of HPC which is that I think HPC, as well as being a fantastic 'talking shop' could take on a proactive role in challenging the property market VI's (i.e. the pro high and rising prices VI's) and their 'high and rising prices are good/desirable,inevitable, etc.' discourse and provide the public with an alternative discourse to consider - i.e. high and rising house prices are bad news, damage the economy, have been central to helping create the current recession, price FTB'ers out of affording a home, stop current mortgage owners moving up the ladder, etc., etc.

I used to suggest the we could:

- send letters to national and local newspapers

- put together draft articles with our arguments/interpretations of the property market and wider economy for journalists to use

- offer journalists case study material of the lived experience of the damage high/rising house prices do to people's lives ...... and/or collections of quotes from people

- e-mails with our arguments (whatever you call the equivalent of chain-mail letters these days) etc.

Obviously there is probably little that can be done .... and it might just be an exercise in 'letting off some steam'. However, it does seem very obvious, from my own anecdotal experience, that joe/jane public desperately need some help to understand that high and rising house prices are not good news and that they will in fact add further damage to the economy with more people losing their jobs, experiencing salary/wage cuts, etc. The Government has done a great job at making the link/relationship between high house prices and the cause of the recession invisible ............ joe/jane public just a little bit of education for them to understand and associate stupidly high house prices with recession, unemployment, higher taxes, cuts in health, social and education services, cuts in salaries, etc.

A couple years ago I did a posting on HPC about the battle of discourses (yep, as in the Foucauldian concepts of power/discourse/truth) that occurs within the property market and the struggle for the status of 'truth' about the property market and house prices. I will add the link to the thread if I can find it.

I don't expect this to go anywhere but I do sometimes think that some of the potential of HPC has never been realised.

And here is the link to the thread about 'Discourse and Action' I started quite a while ago. The thread explains very briefly why I think discourse analysis is a useful approach to help understand the dynamics of the property market, as well as helping to provide an argument for a more proactive role for HPC beyond its 'talking shop' role. See:

http://www.housepricecrash.co.uk/forum/ind...showtopic=30244

Edited by Alfie Moon

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Serious question... why shouldn't 5x mortgages be allowed?

It might be a good move in some cases.

Assume you can get a 10 year fix at 4.99% which is/was possible with a 20% deposit, play with some numbers for yourself:

Example:

http://www.drcalculator.com/mortgage/

Someone on £20k per year could borrow £100K, with monthly repayments of £584

I don't think this should be considered reckless, nor requiring legislation.

Of course, you need the deposit, and you need a good fixed term, but should it be made illegal?

10 year fixes for that amount were very rare before the crash.. and that person would have something like £1250 take home pay.

So at best £700/month after the mortgage. Take away council tax and utilities and you will be on £500/month max. Take away running a basic car (Petrol/tax/servicing) and you'll be down to £300-350/month. Less than £100/week for food and entertainment dosen't look too much fun to me. In the real world, this person is going to see big ticket items go on the credit card which never gets repaid.

So unless your aspiring mortgagee wants to live a life of austerity for the next decade or is very sure of good pay rises in a deflating economy, they would be ill advised to go for this.

A mortgage should be COMFORTABLY affordable FOR 25 YEARS, that is why limits should be set low, and since the private sector has proven unable to do this itself it has ot be legislated for.

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With regards to multiples high multiples may be fine for people that do not have children. As soon as couples with children start applying for mortgages then the multiples should be a lot lower 2.5x to 3.5x.

Assuming that people never want to buy a house before having children, this seems a perfectly sound idea.

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Someone on £20k per year could borrow £100K, with monthly repayments of £584

I don't think this should be considered reckless, nor requiring legislation.

Clearly you earn a lot more than £20k since you have no idea how little money this is. A gross income of £20k is about £1300pcm after tax and NI, so a mortgage of £584 would cost 45% of net income. Add on council tax, utilities, insurance and repairs and you're looking at 60-65% of your income gone on housing, easily. This is doable as long as you plan to eat rice and beans and never lose your job, run a car or take holidays, save for the future, have children, or remortgage at a higher rate after the base rate rises.

5x is not sustainable!

P.S. What can you buy for £100k? A smack round the chops?

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Clearly you earn a lot more than £20k since you have no idea how little money this is. A gross income of £20k is about £1300pcm after tax and NI, so a mortgage of £584 would cost 45% of net income. Add on council tax, utilities, insurance and repairs and you're looking at 60-65% of your income gone on housing, easily. This is doable as long as you plan to eat rice and beans and never lose your job, run a car or take holidays, save for the future, have children, or remortgage at a higher rate after the base rate rises.

5x is not sustainable!

P.S. What can you buy for £100k? A smack round the chops?

Seriously who only earns 20k now... I don't know anyone at the moment who earns that little...

even car workers are on more... people working in macdonalds are earning this at the moment after they tot up the hours...

EDIT

I have a friend who paints lines on a road for over 40k

thats more than me, who trained for over 8 years to be able to this job!!

Edited by MarkyB

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thats right the averge loan in may was 127K makes the yer average loan for FTBs £41237 or your average movers income £46204

you gotta love the stats boys. only those on the top 5% of incomes are moving...or the figues are hiding something

Nah!! Surely not... :rolleyes:

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what the criminals are saying is they will continue with outrageously irresponsible lending, as long as the idiots will fund a huge arrangement fee in order to temporary boosts profits for an illegal enterprise.

We all know the government wants this to happen, the BOE wants it to happen

Still no prosecutions, still no police investigations. :ph34r: The country is both financially and morally bankrupt

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Seriously who only earns 20k now... I don't know anyone at the moment who earns that little...

even car workers are on more... people working in macdonalds are earning this at the moment after they tot up the hours...

EDIT

I have a friend who paints lines on a road for over 40k

thats more than me, who trained for over 8 years to be able to this job!!

Where do you live??

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