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frugalboy

Natwest Lending 16 X Salary!

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Just spoke to a very good friend of mine. He recently inherited about 90k from a parent's death, he's in his early 40s and has always rented. He's determined to buy something (in London) now that he has the opportunity. I've tried to talk him out of it but to be honest I'm starting to wonder if London really is a different beast (mainly because of all the foreign money?) but that's not the point of this post!

Anyway, he went into Natwest today to get a feel for things. He's self-employed in a very unstable profession (theatre/modelling) and his income varies quite a bit, although over the past 4 or 5 years he's done quite well, earning about 40-50k pa on average - he told the person at Natwest that he earns 40k pa and that he has a deposit of 90k. He probably has quite a good credit rating having rented in the same place for over 6 years and he's been a Natwest customer for about 25. Based on an initial search he was advised that they would be able to lend him, get this, 648k!! Yes, you read that right.

I've tried to get my head around this but I'm still a bit shocked. Is this the result of QE (all that money has to go somewhere so they're throwing it in large volumes at what they see as a good risk (given the size of his deposit)? Does anybody have a similar story?

BTW, for anyone who's interested, this is my first post having lurked on here for a couple of years. I've always been good at saving and loathe debt, spent 8 years renting in London (now abroad), refusing to pay the silly asking prices so this site seemed like a natural fit for me :)

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