RichM Posted February 7, 2012 Share Posted February 7, 2012 http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/9065031/Bank-of-England-may-put-limit-on-mortgage-ratios.html Quote Link to comment Share on other sites More sharing options...
RichM Posted February 7, 2012 Author Share Posted February 7, 2012 "But surely the experiment of making no attempt to moderate the credit cycle, let the bubbles grow and burst and then clean up afterwards, has been an unmitigated disaster and I think we would be failing if we didn't look for an alternative approach." Quote Link to comment Share on other sites More sharing options...
200p Posted February 7, 2012 Share Posted February 7, 2012 I am awaiting for him to say "no more boom and bust". Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted February 7, 2012 Share Posted February 7, 2012 This time next year Rodney, we'll be able to buy a house without taking on crippling debt. Quote Link to comment Share on other sites More sharing options...
moneyfornothing Posted February 7, 2012 Share Posted February 7, 2012 on the one hand you have this and on the other hand you have the govt topping up deposits on new builds.. Right hand not knowing what the left hand does? Quote Link to comment Share on other sites More sharing options...
interestrateripoff Posted February 7, 2012 Share Posted February 7, 2012 I am awaiting for him to say "no more boom and bust". He won't it will be no more bust and boom. You see it will be different this time Quote Link to comment Share on other sites More sharing options...
stuckmojo Posted February 7, 2012 Share Posted February 7, 2012 This may be another nail in the coffin for the housing bubble. IF they get on with it. Quote Link to comment Share on other sites More sharing options...
Toto deVeer Posted February 7, 2012 Share Posted February 7, 2012 Tinkering is all the vogue, you know Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 7, 2012 Share Posted February 7, 2012 This would have been a good idea in 1997. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted February 7, 2012 Share Posted February 7, 2012 Key bit is this.... Means they will not put on any limits 'to alleviate a feared credit bust'. All you need to know. The rest is hypothetical. theoretical, nonsensical, irrelevant. Alas Quote Link to comment Share on other sites More sharing options...
FreeFall Posted February 7, 2012 Share Posted February 7, 2012 It'll never happen. Too many homeowners are voters. It'll make Tories (even more) unelectable. Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted February 7, 2012 Share Posted February 7, 2012 This would have been a good idea in 1997. The bankrupt of england had a remit for financial stability all the way through from that time and independence too. They could have done it all themselves. Did they, no. What they did do was lower rates every time the bubble was easing back a bit and kept pumping it up as muh as possible. They also left inflationrip though the basic cost of living. Lots of industry has left for good over the 13 years these money printing crooks have been in "control" of inflation, the public has been soaked in debt and the real economy starved of investment. A bubble blowing central bank with no intention of following its publicly stated remit. Quote Link to comment Share on other sites More sharing options...
200p Posted February 7, 2012 Share Posted February 7, 2012 The alcoholic been given the keys to the wine cellar. I will control my drunkeness, I (hiccup) will, I will! YOU ARE THE PROBLEM! Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted February 7, 2012 Share Posted February 7, 2012 Tinkering is all the vogue, you know Don't just stand there Let's get to it Raise the rate There's nothing to it Quote Link to comment Share on other sites More sharing options...
ScrewsNutsandBolts Posted February 7, 2012 Share Posted February 7, 2012 Don't just stand there Let's get to it Raise the rate There's nothing to it They had denial, they had mates Mervyn King gave good rates Bean, Posen, Broadbent too David Blanchflower, they screwed you Quote Link to comment Share on other sites More sharing options...
okaycuckoo Posted February 7, 2012 Share Posted February 7, 2012 Sounds like this is going along with the new EU reg on risk weighting for mortgage lenders. The reg has no cyclicality and applies regardless of any tweaking by parliament, so I can't see how the UK avoids an outright restriction on mortgage lending. Quote Link to comment Share on other sites More sharing options...
Toto deVeer Posted February 7, 2012 Share Posted February 7, 2012 If they are serious about stabilizing housing and the economy, why not remove all existing taxes on property and instead tax 100% of capital gains? That is the fairest way to do it. Quote Link to comment Share on other sites More sharing options...
long time lurking Posted February 7, 2012 Share Posted February 7, 2012 Don't know if they will go through with it but , after watching the film money masters ,It is what has happened historically i.e expand the money supply get every one up to there eyeballs in debt Then contract the money supply and squeeze, the over leveraged then go bust and they get the assets for penneys on the pound (Peacocks come to mind) and the rest struggle on and fill the bonus pot with the interest payments on their massive loans And apparently this has been going on since the Roman times if the the film is correct ,but it all seems to fit in my eye`s Quote Link to comment Share on other sites More sharing options...
leicestersq Posted February 7, 2012 Share Posted February 7, 2012 The bankrupt of england had a remit for financial stability all the way through from that time and independence too. They could have done it all themselves. Did they, no. What they did do was lower rates every time the bubble was easing back a bit and kept pumping it up as muh as possible. They also left inflationrip though the basic cost of living. Lots of industry has left for good over the 13 years these money printing crooks have been in "control" of inflation, the public has been soaked in debt and the real economy starved of investment. A bubble blowing central bank with no intention of following its publicly stated remit. Gordon Brown took away many powers from the Bank of England and gave them to the FSA. The Bank of England were smarting about them for years but couldnt complain about the decision in public or private, as it would have looked like sour grapes. So they resorted to waiting and dropping hints about what was going on, all the time hoping for a bust to reveal incompetence at the FSA. The Bank of England appear to have won in the end, and I bet that they have been lobbying for this particular power. I am sure mortgage lenders will come into line and loans with a deposit of less than 20% will become a rarity if the BofE wish to keep this power. Where that leaves the housing department and all those councils helping people with small deposits is a bit of a mystery though. Best thing would be to have a quiet word and get them closed down without further fanfare. Quote Link to comment Share on other sites More sharing options...
koala_bear Posted February 7, 2012 Share Posted February 7, 2012 The Bank of England appear to have won in the end, and I bet that they have been lobbying for this particular power. I am sure mortgage lenders will come into line and loans with a deposit of less than 20% will become a rarity if the BofE wish to keep this power. Basel 3 enforcement via the up coming EU regs should put the brakes on the vast majority having mortgage deposits of less than 15-20%, small deposit lending will still be possible for a minority of borrowers - effectively FTBs because the loan amount would need to be small to keep the overall risk weighting down, small deposits for those trading up or MEWing would be the areas hit hard. The council scheme /developer type schemes wouldn't necessarily be effected as they are FTB focused an area lightly to remain partially low deposit. Quote Link to comment Share on other sites More sharing options...
Snugglybear Posted February 7, 2012 Share Posted February 7, 2012 Basel 3 enforcement via the up coming EU regs should put the brakes on the vast majority having mortgage deposits of less than 15-20%, small deposit lending will still be possible for a minority of borrowers - effectively FTBs because the loan amount would need to be small to keep the overall risk weighting down, small deposits for those trading up or MEWing would be the areas hit hard. The council scheme /developer type schemes wouldn't necessarily be effected as they are FTB focused an area lightly to remain partially low deposit. Except that they'll be open to all buyers, not just FTBs, if things stay as they are. http://www.housepricecrash.co.uk/forum/index.php?showtopic=174662&st=0 Question: do the upcoming EU regs have anything to say on guarantees (from councils, parents, whoever)? Quote Link to comment Share on other sites More sharing options...
leicestersq Posted February 7, 2012 Share Posted February 7, 2012 Except that they'll be open to all buyers, not just FTBs, if things stay as they are. http://www.housepricecrash.co.uk/forum/index.php?showtopic=174662&st=0 Question: do the upcoming EU regs have anything to say on guarantees (from councils, parents, whoever)? What the BofE will bring to the table is the oversight that stops banks finding ways around the legislation. They will enforce the spirit of the law rather than the letter. Quote Link to comment Share on other sites More sharing options...
cells Posted February 7, 2012 Share Posted February 7, 2012 IMO prices are now linked to the rent you can extract from the house for the vast majority of the country. So increasing the deposit required or salery multiple caps will not have a huge impact. There are lots of pension funds, rich companies, rich individuals, and other entities who would love to purchase houses at £100k becuase then the yeild would be over 10% inflation linked! which is FAR larger yeild than the other big assets of government debt and stocks. IMO just charge 2% of the pricec of the house per year as a tax payable by the owner. Scrap council tax and put the 0% income tax level from the current £7.5k to £15k Average home owner would be no worse off The wilsons with 1000 houses would be £3.2 million pa worse off The Ultra rich with their £50m houses will have to pay £1m per year property tax rather than £3k council tax Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 7, 2012 Share Posted February 7, 2012 IMO prices are now linked to the rent you can extract from the house for the vast majority of the country. So increasing the deposit required or salery multiple caps will not have a huge impact. There are lots of pension funds, rich companies, rich individuals, and other entities who would love to purchase houses at £100k becuase then the yeild would be over 10% inflation linked! which is FAR larger yeild than the other big assets of government debt and stocks. IMO just charge 2% of the pricec of the house per year as a tax payable by the owner. Scrap council tax and put the 0% income tax level from the current £7.5k to £15k Average home owner would be no worse off The wilsons with 1000 houses would be £3.2 million pa worse off The Ultra rich with their £50m houses will have to pay £1m per year property tax rather than £3k council tax there is little relationship between rent and house prices, and if there is one, then its the cost of mortgages, not the rent that is the influence. Quote Link to comment Share on other sites More sharing options...
leicestersq Posted February 7, 2012 Share Posted February 7, 2012 IMO prices are now linked to the rent you can extract from the house for the vast majority of the country. That has always been true. There is always a relationship between capital values and the income something can provide. So increasing the deposit required or salery multiple caps will not have a huge impact. The affect might be larger than you think. There is a two way feedback, if people bid less, prices fall, and that can in turn cause rents to fall. You are right though, I cant see it having a huge affect. Too many people after too little housing, the price outcome is inevitable. There are lots of pension funds, rich companies, rich individuals, and other entities who would love to purchase houses at £100k becuase then the yeild would be over 10% inflation linked! which is FAR larger yeild than the other big assets of government debt and stocks. That yield isnt guaranteed though as I have pointed out. Rents can fall if circumstances such as immigration, new housing and HB levels change. IMO just charge 2% of the pricec of the house per year as a tax payable by the owner. Scrap council tax and put the 0% income tax level from the current £7.5k to £15k Average home owner would be no worse off A flat rate land value tax. What is wrong with a progressive one? The wilsons with 1000 houses would be £3.2 million pa worse off The Ultra rich with their £50m houses will have to pay £1m per year property tax rather than £3k council tax The Wilsons would be a lot worse off if you had a progressive land value tax. The ultra rich too would be crying into their champagne. Why on earth would you want a flat rate one? Quote Link to comment Share on other sites More sharing options...
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