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Robert Peston reckons the x4 rule for mortgages over £500k is the most likely outcome together with tighter affordability tests measured against a 7% mortgage rate,

http://www.bbc.co.uk/news/business-28031777

So why not under £500K ?

We'll get more talk and more idiotic schemes to help low end buyers and stop top end buyers....i.e. to push up prices and support the rich.

If your poor you have less ability to afford a house and mroe likely to try and stretch yourself to try and get as much free untaxed unearned future income ( if you believe them at the top of the pyramid ) as possible.

Edited by TheCountOfNowhere

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Robert Peston reckons the x4 rule for mortgages over £500k is the most likely outcome together with tighter affordability tests measured against a 7% mortgage rate,

http://www.bbc.co.uk/news/business-28031777

This 7% mortgage rate thing is quite bizarre.

BoE themselves have said rates at the peak of the next tightening cycle will be materially below 5%.

It seems the only way they can get macro pru to work is to just make up quite arbitrary numbers.

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This 7% mortgage rate thing is quite bizarre.

BoE themselves have said rates at the peak of the next tightening cycle will be materially below 5%.

Interest rates or mortgage rates ?

There are plenty of people with a 2.5% tracker mortgages....put the interest rate to 4.5% and what do you have ?

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Interest rates or mortgage rates ?

There are plenty of people with a 2.5% tracker mortgages....put the interest rate to 4.5% and what do you have ?

A period of sustained economic expansion & rising wages.

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New affordability test:-

+ 3% interest rate taken at outset of the loan

15% cap expected to be hit within the next year.

Won't affect 'current' housing lending.

Won't prohibit an 'expansion' of mtge lending.

Edit: No NEW loans > 4.5LTI under HTB scheme announced by Osborne today

Don't affect central outlook to economy.

Designed to prevent instability from tail risk.

Basically, they want to allow a durable rise in nominal house prices but attempt to avoid an overheated market.

Edited by R K

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repo's

Logical but unpopular :)

Adair thinks the steam should be released from BTL mortgages. I agree with the dapper man, that would be a good place to start and less likely to result in sentimental bad press.

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Edit: No NEW loans > 4.5LTI under HTB scheme announced by Osborne today

Is this 4.5 x main or joint income?

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Logical but unpopular :)

Adair thinks the steam should be released from BTL mortgages. I agree with the dapper man, that would be a good place to start and less likely to result in sentimental bad press.

Nope the BBC would run stories on sad faced tenants being evicted, despite their gallant landlords attempts to keep them housed.

Edited by aSecureTenant

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New affordability test:-

+ 3% interest rate taken at outset of the loan

15% cap expected to be hit within the next year.

Won't affect 'current' housing lending.

Won't prohibit an 'expansion' of mtge lending.

Edit: No NEW loans > 4.5LTI under HTB scheme announced by Osborne today

Don't affect central outlook to economy.

Designed to prevent instability from tail risk.

Basically, they want to allow a durable rise in nominal house prices but attempt to avoid an overheated market.

it's the "Won't affect 'current' housing lending." thats the problem !!!!!!!!!

More talk. No action.

Banker thievery to continue.

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Carney:

You can see this 85:15 ratio as an encouragement to increase lending at <4.5LTI because in order to extend more loans at > 4.5LTI the lender must increase lending at < 4.5 LTI

THIS IS AN IMPORTANT CAVEAT THAT THE MEDIA MIGHT MISS.

HE'S MAKING CLEAR LENDERS WILL NEED TO INCREASE LENDING.

Buy a house, get on with your lives. This market will run for another 10 years.

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Buy a house, get on with your lives. This market will run for another 10 years.

Sadly, I think you might be right.

A lot of talk on here about interest rates going to say 3% can't see it myself.

Printy, printy, I can see.

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Sadly, I think you might be right.

A lot of talk on here about interest rates going to say 3% can't see it myself.

Printy, printy, I can see.

Mass protests on the streets 4 weeks after printy printy I can see.

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BTL mortgages are NOT included.

Who knew!

* BTL is not relevant for 'household indebtedness' as far as BoE stability is concerned. They view the rental market (BTL) as a different market - Andrew Bailey

Edited by R K

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Bond Vigilantes @bondvigilantes 14m

Carney FPC 3% rate hike stress test: gilt market currently prices in rates above 3% somewhere around 2019.

By which time of course nominal wages will be higher. If they weren't rates wouldn't be 3% higher.

Carney's been very smart here.

EDIT: Carney relating his personal experience of living in the UK during the tail end of the Thatcher/Lawson housing boom in the 80s and the damage that caused. Haha.

Edited by R K

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BTL mortgages are NOT included.

Who knew!

* BTL is not relevant for 'household indebtedness' as far as BoE stability is concerned. They view the rental market (BTL) as a different market - Andrew Bailey

They are investments don't ya know?

Unregulated investments that affect millions of households - but not relevant.

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They are investments don't ya know?

Unregulated investments that affect millions of households - but not relevant.

They've got this completely sewn up. The FPC mandate is financial stability. They're decided the primary risk is household lending in the OO market. They see BTL lending as completely different and will address it differently, but clearly don't see it as a financial stability risk in the same way as the OO housing market.

Nudding poisonal, just bizzness.

Graeme Wearden @graemewearden 9m

House builders' shares are up -- Bank of England hasn't gone as far as some in the City had expected in reining in the market...

Edited by R K

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BTL mortgages are NOT included.

Who knew!

* BTL is not relevant for 'household indebtedness' as far as BoE stability is concerned. They view the rental market (BTL) as a different market - Andrew Bailey

Little do they know that BTL is the new sub prime. Or maybe they do but have the BS ready for when that blows up in their faces.

I just know too many 'self employed, without accounts' types that got houses on BTL mortgages and live in them themselves. They had good deposits though.

Edited by aSecureTenant

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They are investments don't ya know?

Unregulated investments that affect millions of households - but not relevant.

Now we know what they consider is more important....property for use as investments, homes to buy and let out, not homes for people to buy to live in..... ;)

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Exclusions–Re-mortgages

2.20

Certain types of re-mortgages would be excluded from the limit. Excluded re-mortgages

do not count towards either the total number of mortgages completed or the percentage

of mortgages completed with an LTI ratio of 4.5 or higher.

2.21

Remortgages with no increase in principal do not constitute an increase in indebtedness.

This type of re-mortgage , whether with the same provider or a new provider, is therefore

not in scope of the limit.



2.27

Lifetime mortgages and Equity Release products are excluded as they do not conform to

the typical measures of loan and income

.

2.28

Second Charge mortgages are excluded as they are not sub ject to PSD reporting

.

Whilesecond charge mortgage lending is currently relatively small and undertaken principally by

regulated entities, we recognise it is an obvious source of potential leakage

Edited by R K

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