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All that this will achieve is an increased shift to BTL mortgage fraud - already (imo) extensive. Becoming both tenant and landlord in the same property - it's the way forward :P

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Hi all,

Not posted for a while now due to more pressing matters, and a slight loss of interest.

However, I felt the need to break radio silence to bring up the subject of the Mortgage Market Review. These are sweeping changes being brought in by the FCA. They kick in this weekend.

I won't bleat on about it too much (you can read about it here http://www.fca.org.uk/firms/firm-types/mortgage-brokers-and-home-finance-lenders/mortgage-market-review)

For me, the key bit is this:

"Lenders will be fully responsible for assessing whether the customer can afford the loan, and they will have to verify the customer's income. They can still choose to use intermediaries in this process, but lenders will remain responsible.". No passing the buck, it seems!

The implication is that banks will have to assess affordability, possibly anticipate expected rises in interest rates, and the borrower could potentially have some comeback against the lender if a loan turns out to be unaffordable. From various people I have spoken to, this is being seen as something that will have a significant amount of credit available for mortgage financing. The perception is that the FCA are saying that people need saving from themselves.

Just thought it would be interesting to see what happens!! I don't expect much for a couple of months but after that we'll see!

Hold the line :-)

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All that this will achieve is an increased shift to BTL mortgage fraud - already (imo) extensive. Becoming both tenant and landlord in the same property - it's the way forward :P

That would be confusing. How can they 'get on with their lives' if they are renting? And yet they will be an 'owner' and therefore rich and successful, apparently. I expect the phone line is always engaged when they call the landlord to sort out that washing machine. And those inspections can be rather intrusive can't they, although the landlords time keeping can't be faulted.

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Prices will come down when a large number of politicans cannot afford a reasonable home of their own. that's if they manage to keep the ponzi going that long.

They can only rent now. However I think that more and more of them are beginning to realize the HPI ponzi is failing, fewer and fewer FTB. Apparently half of MPs rent from other MPs, so a certain percentage is having to deal with London letting agents so will be aware of the insanity of this bubble even if they aren’t having to pay for it themselves.

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I would guess guess the extra checks are a matter of process and recording.

Fail to perform these checks and keep valid records and the banks will be risk being sued if things go wrong.

I speak as someone who has looked at a lot of records from endowment's haydays.

Most life insurances failed to keep any records, a lot of stuff they had a tendency to have forged customers signatures.

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Sorry if this has been stated already... But could this mean someone coming to the end of a fixed period is unable to remortgage and potentially stuck with a higher rate?

That would surely be a huge deal, far worse than anyone looking to buy.

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Is this the end......of.......LIAR LOANS.

Somehow I doubt it :lol:

P.S. I posted in a different thread about Ray Boulger on LBC, if I remember correctly, urging people to buy before these rules came into force.

I rushed straight out...the room before I stood on my radio.

Edited by TheCountOfNowhere

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Hi all,

Not posted for a while now due to more pressing matters, and a slight loss of interest.

However, I felt the need to break radio silence to bring up the subject of the Mortgage Market Review. These are sweeping changes being brought in by the FCA. They kick in this weekend.

I won't bleat on about it too much (you can read about it here http://www.fca.org.uk/firms/firm-types/mortgage-brokers-and-home-finance-lenders/mortgage-market-review)

For me, the key bit is this:

"Lenders will be fully responsible for assessing whether the customer can afford the loan, and they will have to verify the customer's income. They can still choose to use intermediaries in this process, but lenders will remain responsible.". No passing the buck, it seems!

The implication is that banks will have to assess affordability, possibly anticipate expected rises in interest rates, and the borrower could potentially have some comeback against the lender if a loan turns out to be unaffordable. From various people I have spoken to, this is being seen as something that will have a significant amount of credit available for mortgage financing. The perception is that the FCA are saying that people need saving from themselves.

Just thought it would be interesting to see what happens!! I don't expect much for a couple of months but after that we'll see!

Hold the line :-)

Missed this post (somehow).

I agree.

No bail outs, no leniency, expect to be sued, money clawback.

Think about it - do you really want to be in power when another bank crisis hits?

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Sorry if this has been stated already... But could this mean someone coming to the end of a fixed period is unable to remortgage and potentially stuck with a higher rate?

That would surely be a huge deal, far worse than anyone looking to buy.

If anyone knows would like this cleared up too?

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So what checks were being done under the old system ? From experience the ones I went to only tested affordability at current interest rates. many ftb buyers max out to this

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So what checks were being done under the old system ?

Checks to see if you can stretch yourself a bit more and over-pay even more for a shoe box house life time of debt

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Missed this post (somehow).

I agree.

No bail outs, no leniency, expect to be sued, money clawback.

Think about it - do you really want to be in power when another bank crisis hits?

hey..thats what is supposed to happen.

Your bank manager, one of the three wise men in a business, are not wise at all, indeed, he is naturally a theiving *******, needing to have every action he undertakes regulated by a legal third party because the moment he isnt he tends to;

put personal income above all else.

will put a third party in to do the lies and earn for him (IFA and mortgage brokers)

will lie to his bank about the quality of his loanbook and potential borrowers.

will lie to the banks owners and investors about the same things.

will lie to the regulators about the worth of the loan book.

will create shell companies to recycle these worthless pieces of turd to legitimate pension funds and munis

will demand bail outs the moment his scheme is outed by reality

will pay the PsTB whatever it takes to keep the regulators off his back while he continues doing "gods work".

Really, if people give a frack about paying back anything issued by a bank, then really, they need to open their eyes.

Bankrupt the lot of them I say.

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Sorry if this has been stated already... But could this mean someone coming to the end of a fixed period is unable to remortgage and potentially stuck with a higher rate?

That would surely be a huge deal, far worse than anyone looking to buy.

Teaser rates have always been…. teaser rates. Obviously what has happened is people take on the debt at the teaser rate level and can barely afford that, but they're too stupid to think ahead further than the first payment.

Rates are going to rise for all borrowers who bought with a teaser rate come what may, so that future self inflicted problem is already baked in.

What it should mean is negative equity for those who bought in the bubble, as prices ought to fall in line with the availability of credit and that well looks set to dry up at last.

I don't think the cost of borrowing should increase directly as a result of this, just the amount that can be borrowed. If you're in a house with large debt get ready for negative equity, if you got a teaser rate your rate is going to go up (obviously), if you think the next generation are about to pay for your retirement for you via selling your house to them for enough to live on whilst cruising the med for 20 years become concerned. Its too late mind. If only there was a website where people had been talking about the end of the bubble.

Heres hoping for affordable housing.

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Teaser rates have always been…. teaser rates. Obviously what has happened is people take on the debt at the teaser rate level and can barely afford that, but they're too stupid to think ahead further than the first payment.

Rates are going to rise for all borrowers who bought with a teaser rate come what may, so that future self inflicted problem is already baked in.

What it should mean is negative equity for those who bought in the bubble, as prices ought to fall in line with the availability of credit and that well looks set to dry up at last.

I don't think the cost of borrowing should increase directly as a result of this, just the amount that can be borrowed. If you're in a house with large debt get ready for negative equity, if you got a teaser rate your rate is going to go up (obviously), if you think the next generation are about to pay for your retirement for you via selling your house to them for enough to live on whilst cruising the med for 20 years become concerned. Its too late mind. If only there was a website where people had been talking about the end of the bubble.

Heres hoping for affordable housing.

Teaser rates are everywhere. Savings accounts, mortgages, mobile phone contracts, broadband contracts, entertainment (Sky etc), most hire purchases, etc... etc... etc...

Has the world gone mad? Can people not add up the payments and divide by the number of months to find out what it costs?

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http://www.homeloans.ie/en/mortgage.php?id=8

Noticed khards said on the news page that the new MMR rules sound similar to gaining a mortgage in Ireland. So basing a mortgage on net income presumably makes it less likely of getting a mortgage anything like the average house price for a studio flat , yes? I think khards said he was offered something like £85,000 on a combined income of over £50,000 but if they had had children they would not have been offered anything!

How Much Can I Borrow?

Ok now you know how much of a mortgage you can afford, but this doesn’t mean an Irish bank/building society will lend you this amount. Only a few years ago, the amount you could borrow was based on a multiple of your gross income, usually two and a half times the main earner and once the second.

While some mortgage lenders still use a similar calculation to this i.e. 4 times the joint gross income, more have moved to using a percentage of net income.

Surely though the "only a few years ago" borrowing for many was one hell of a lot more than 2 1/2 x's the main earner with some as high as 10x's ! So £50,000 income and no children results in an offer of £85,000 mortgage, that HAS to do something serious to house prices doesn't it, as of course it has in Ireland, where very little sells despite it being marketed at least 50% below peak and I would imagine, very few couples earning anything like £50,000 let alone having no children!

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http://www.homeloans.ie/en/mortgage.php?id=8

Noticed khards said on the news page that the new MMR rules sound similar to gaining a mortgage in Ireland. So basing a mortgage on net income presumably makes it less likely of getting a mortgage anything like the average house price for a studio flat , yes? I think khards said he was offered something like £85,000 on a combined income of over £50,000 but if they had had children they would not have been offered anything!

How Much Can I Borrow?

Ok now you know how much of a mortgage you can afford, but this doesn’t mean an Irish bank/building society will lend you this amount. Only a few years ago, the amount you could borrow was based on a multiple of your gross income, usually two and a half times the main earner and once the second.

While some mortgage lenders still use a similar calculation to this i.e. 4 times the joint gross income, more have moved to using a percentage of net income.

Surely though the "only a few years ago" borrowing for many was one hell of a lot more than 2 1/2 x's the main earner with some as high as 10x's ! So £50,000 income and no children results in an offer of £85,000 mortgage, that HAS to do something serious to house prices doesn't it, as of course it has in Ireland, where very little sells despite it being marketed at least 50% below peak and I would imagine, very few couples earning anything like £50,000 let alone having no children!

I tried one of the new calculators and it still suggests I can borrow a hell of a lot - £320k (which I wouldn't anyway). But you have to have 0s in almost all the debt/expenditure boxes. That will be the shock - people will have to confront their existing debt spending and realise it is a barrier to their property "ambitions". I welcome that because a good income should be able to buy a good house affordably rather than how big a mortgage you can stomach or lie you way into.

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Nice one, the OP has telephone number debt and admits the only game in town is price rtises.

BTLers talking about moving into rented to take advantage of poor yields on larger homes... priceless.

Hi

I enjoued this:

"To put a positive spin on this, it could be good news for landlords. Personally I can’t see property prices falling because the vast majority of people can’t take a hit on the value of their home due to lack of equity."

I have puzzled over this for hours :)

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Hi

I enjoued this:

"To put a positive spin on this, it could be good news for landlords. Personally I can’t see property prices falling because the vast majority of people can’t take a hit on the value of their home due to lack of equity."

I have puzzled over this for hours :)

I puzzled over that one. I do believe in fairies, I do, I do, I do...

I can only assume that the author means "no one will sell at lower prices, since they can't afford to, therefore prices won't fall."

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I puzzled over that one. I do believe in fairies, I do, I do, I do...

I can only assume that the author means "no one will sell at lower prices, since they can't afford to, therefore prices won't fall."

The flaw being actual sales set the value, not sitting it out. It would be like claiming a sandwich is worth a million pounds because you say it is, and if sellers won't come along and give me a million quid for it well then I'm not selling. Meanwhile the sandwich shop down the road settles for 2 quid.

Delusional.

The only answer is prices have to fall. The contortions these lot go through to try and avoid that elephant in the room are fun to watch.

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The flaw being actual sales set the value, not sitting it out. It would be like claiming a sandwich is worth a million pounds because you say it is, and if sellers won't come along and give me a million quid for it well then I'm not selling. Meanwhile the sandwich shop down the road settles for 2 quid.

Delusional.

The only answer is prices have to fall. The contortions these lot go through to try and avoid that elephant in the room are fun to watch.

ah, but before the market does its work, the rallying cry is shouted loud: "got to get the market moving!"

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Teaser rates have always been. teaser rates. Obviously what has happened is people take on the debt at the teaser rate level and can barely afford that, but they're too stupid to think ahead further than the first payment.

Rates are going to rise for all borrowers who bought with a teaser rate come what may, so that future self inflicted problem is already baked in.

What it should mean is negative equity for those who bought in the bubble, as prices ought to fall in line with the availability of credit and that well looks set to dry up at last.

I don't think the cost of borrowing should increase directly as a result of this, just the amount that can be borrowed. If you're in a house with large debt get ready for negative equity, if you got a teaser rate your rate is going to go up (obviously), if you think the next generation are about to pay for your retirement for you via selling your house to them for enough to live on whilst cruising the med for 20 years become concerned. Its too late mind. If only there was a website where people had been talking about the end of the bubble.

Heres hoping for affordable housing.

Sure but just like interest rates on current accounts, many will opt to remortgage for new teaser rates, maybe they took a better teaser rate for a higher following rate with a plan to remortgage.

Now I've never bought a house nor had a mortgage but I'm quite aware that remortgaging can save a fair bit of money and is something that a lot of people tend to do.

Except by the sounds of things, they now can't.

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ah, but before the market does its work, the rallying cry is shouted loud: "got to get the market moving!"

Oh it'll move alright. Just not in the direction they'd like.

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Hang on

I'm not talking about teaser rates, maybe the guy I quoted was. I'm talking about if you usual mortgage deal of 5 years runs out and you have to get a new deal, and you have 15 years remaining for example, will they test you like this even to pay a mortgage you've been paying 10 years on non teaser, regular 5% fixed terms?

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Sure but just like interest rates on current accounts, many will opt to remortgage for new teaser rates, maybe they took a better teaser rate for a higher following rate with a plan to remortgage.

Now I've never bought a house nor had a mortgage but I'm quite aware that remortgaging can save a fair bit of money and is something that a lot of people tend to do.

Except by the sounds of things, they now can't.

You presumably can't borrow more than the value of the asset against which that borrowing is secured. When that value falls to the point at which you're in negative equity presumably you can't remortgage, and when your teaser ends you can't get anything else. That wouldn't be a problem if you based your affordability calculations on the real rate rather than the teaser rate. If people get into trouble because of that its their own stupid fault. Id expect it to be a minority of households, but any repossessions that occur as a result of that will lead to a further lowering of prices and so is beneficial to the financially prudent and the rest of the economy, so its all good longer term.

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Hang on

I'm not talking about teaser rates, maybe the guy I quoted was. I'm talking about if you usual mortgage deal of 5 years runs out and you have to get a new deal, and you have 15 years remaining for example, will they test you like this even to pay a mortgage you've been paying 10 years on non teaser, regular 5% fixed terms?

Isn't a new deal a different rate on the same borrowing? You can't get a 5 year mortgage typically. If the underlying asset against which the borrowing is secured has fallen in value you'd have problems borrowing against it again for the same amount I guess.

'Deal' sounds like teaser to me?

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  • 399 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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