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The Masked Tulip

Bank Of England About To Make It More Expensive To Get A Mortgage

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Just now on Newsnight. Surprise, surprise they interviewed someone crom the builders who didn't think that mortgage restrictions was a good idea.

Someone else commented that the bubble never burst.

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Very poor piece IMPO.

+1

He says there's no bubble because people want to move there and interest rates are low. But people wanted to buy tulips and presumably they had cash to to this as well as the desire.

The tests of a bubble are not "do people want to buy" and "can they afford it", but "how much sentiment and heard instinct is affecting the prices people are paying?" In this respect of course it's a bubble.

I've never seen this reporter on Newsnight before but to me he looks like one of the many reasons Paxman would have got fed up and left.

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you have to remember that the BBC is a Government based organisation.

They "think" via policy, ie, tickbox systems and programs.

Therefore, they will have a program for "bubblemania".

tick box one...are prices rising?

tickbox two...are the rises being leveraged with debt?

tickbox three...is the leverage uncontrolled by regulation?

one= yes, two = yes, three = no...it is therefore impossible for there to be a bubble as a mark of a bubble is unregulated and therefore speculative and out of reach of normal market participants.

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A close family member recently bought an 850k property in the South East on an IO mortgage with 10% deposit. Combined earnings of circa 150k and plenty of outstanding unsecured credit.Based on this, I see little evidence of any tightening in lending criteria from the major banks..

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A close family member recently bought an 850k property in the South East on an IO mortgage with 10% deposit. Combined earnings of circa 150k and plenty of outstanding unsecured credit.Based on this, I see little evidence of any tightening in lending criteria from the major banks..

Expensive this living well.......£85k loss of deposit, what else has he got to lose? ;)

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A close family member recently bought an 850k property in the South East on an IO mortgage with 10% deposit. Combined earnings of circa 150k and plenty of outstanding unsecured credit.Based on this, I see little evidence of any tightening in lending criteria from the major banks..

One anecdote, so one lender. Who was the lender in this case and are you sure it was not a lie to let mortgage? Where you get a BTL mortgage but actually plan on being the tenant yourself.

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One anecdote, so one lender. Who was the lender in this case and are you sure it was not a lie to let mortgage? Where you get a BTL mortgage but actually plan on being the tenant yourself.

and what does "recently" mean...and is the poster being told the truth, the whole truth, and nothing but the truth...In my experience, only people on the ropes come close to revealing their true position.

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Its not a bubble while its actually happening.

Its only a bubble when its burst and everyone has lost money or in negative equity.

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There is no bubble as its still viewed as small increases. The exponential problem is just ignored.

Funny enough this behaviour is observed a lot in financial markets. FTSE 100, Forex etc.

I think however the government must be taking aback with all the bubble scare talk. It must have assumed the normal 'bubble feel good factor' would just prevail.

The bubble cycles are far too close together methinks.

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There is no bubble because the economy is always at or near perfect equilibrium and crashes are caused by exogenous events outside of our control.

Literally, this what generations of Phud workers at the Treasury and BoE have been taught to believe!

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I think however the government must be taking aback with all the bubble scare talk. It must have assumed the normal 'bubble feel good factor' would just prevail.

Their problem is that housing costs have risen so high. The sheeple all know that even before the CC things were stupid. Even today there is a story in the MSM that people are starting to refuse to pay the higher prices now demanded for houses.

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Expensive this living well.......£85k loss of deposit, what else has he got to lose? ;)

The plan is to benefit from any future price rises on account of Cross Rail and sell up before the promotional rate on the mortgage runs out in 3 years time...

One anecdote, so one lender. Who was the lender in this case and are you sure it was not a lie to let mortgage? Where you get a BTL mortgage but actually plan on being the tenant yourself.

I suspect there is a bit of "Lie to Buy" involved as he is self employed in IT and uses various tax dodges to reduce income tax liability-from what I know, his declared earnings are just below threshold for the higher tax band whilst the rest of his income is invested into the company that he operates through. He also owns a few BTLs (all new build) on 100% mortgages taken out during the boom years. The trouble is, he has been very cagey about details as he has come to regard me as a bit of a doom monger ever since I dissuaded him from a potentially disastrous commercial property deal so I didn`t find out about this until he had exchanged (which is very odd given he is very *close* family..)

Not sure about the lender but the mortgage was arranged through a broker who is prone to play fast and loose with rules based on my brief dealings with him. Regardless, this episode demonstrates that there are still lenders out there who are failing to conduct due diligence and are happily lending 5X combined incomes or over on inflated valuations..

and what does "recently" mean...and is the poster being told the truth, the whole truth, and nothing but the truth...In my experience, only people on the ropes come close to revealing their true position.

"Recently" as in completed 3 weeks ago..

Edited by thirdwave

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The plan is to benefit from any future price rises on account of Cross Rail and sell up before the promotional rate on the mortgage runs out in 3 years time...

I suspect there is a bit of "Lie to Buy" involved as he is self employed in IT and uses various tax dodges to reduce income tax liability-from what I know, his declared earnings are just below threshold for the higher tax band whilst the rest of his income is invested into the company that he operates through. He also owns a few BTLs (all new build) on 100% mortgages taken out during the boom years. The trouble is, he has been very cagey about details as he has come to regard me as a bit of a doom monger ever since I dissuaded him from a potentially disastrous commercial property deal so I didn`t find out about this until he had exchanged (which is very odd given he is very *close* family..)

Not sure about the lender but the mortgage was arranged through a broker who is prone to play fast and loose with rules based on my brief dealings with him. Regardless, this episode demonstrates that there are still lenders out there who are failing to conduct due diligence and are happily lending 5X combined incomes or over on inflated valuations..

"Recently" as in completed 3 weeks ago..

so the mortgage was from when?...3 months ago?

complete mortgages are unlikely to have been since MMR was enabled.

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so the mortgage was from when?...3 months ago?

complete mortgages are unlikely to have been since MMR was enabled.

You're probably right there. Exchanged in early March,completed early May..

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