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Key Workers Locked Out

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Key workers locked out

James Coney, Daily Mail

3 August 2005

THOUSANDS of young teachers, nurses and firemen cannot buy Government-backed affordable homes because banks and building societies will not give them mortgages.


The gist of the article is that key workers are finding it difficult, despite thier favoured status, to get credit from banks.

Alliance and Leicester banks on buy-to-let housing market


Banks - who take your savings to lend out - can clearly see that with the immense range of tax breaks and schemes on offer for investors, BTL lending is the more secure.

Even key workers/employees who the government has targeted help and favours onto, are finding they are still in the same trap as you lot

i.e. - How can people outbid investors for a home, when investors have massive tax breaks/relief. Upto 40% off the price with SIPPS.

They cannot.

From the point of view of the banks, the BTL investor is the better credit risk as the renting class expands, they can see the ordinary homeowner is locked out - EVEN WITH GOVERNMENT HELP!

Do you really think you will ever be able to afford a home - if you have to outbid an investor the price will have to be very high - how will you get credit if the banks start to realise this change in the market?

A hundred years ago, most people rented. House prices were 3.5 earnings as the supply was not curtailed. Dispite unemployment being unheard of, they simply could not obtain credit to buy thier own place. You were either a member of the property owner class, or had a hard time in the rented class below.

The division of wealth was immense and opportunities, professions etc.. were on a plate to the most stupid of the landlord class, while people below had very little chance of advancement.

Now houseprices are 6-7 times earnings, and today it looks like banks are starting to withdraw creditlines from those without pre-existing (boom-time) equity. The banks lending focus is going to increasingly turn towards the richest section of society - the BTL investor. It is inexorable, and will gather pace as the market polorises over the near future.

We are heading swiftly towards a rentier economy.

Edited by brainclamp

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