silver surfer Posted June 26, 2014 Report Share Posted June 26, 2014 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 Quote Link to post Share on other sites
TheCountOfNowhere Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by TheCountOfNowhere Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
TheCountOfNowhere Posted June 26, 2014 Report Share Posted June 26, 2014 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 ? Quote Link to post Share on other sites
Reck B Posted June 26, 2014 Report Share Posted June 26, 2014 put the interest rate to 4.5% and what do you have ? repo's Quote Link to post Share on other sites
zugzwang Posted June 26, 2014 Report Share Posted June 26, 2014 4x joint + 5% deposit courtesy HtB1 = 7.5x main. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 Michael Hewson @mhewson_CMC 57s *BOE: NO MORE THAN 15% OF NEW MORTGAGES SHOULD EXCEED 4.5 LTI Expand *BOE TO SET NEW TEST ON BORROWERS' ABILITY TO REPAY MORTGAGES Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by R K Quote Link to post Share on other sites
little fish Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
Guest Posted June 26, 2014 Report Share Posted June 26, 2014 Edit: No NEW loans > 4.5LTI under HTB scheme announced by Osborne today Is this 4.5 x main or joint income? Quote Link to post Share on other sites
@contradevian Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by aSecureTenant Quote Link to post Share on other sites
TheCountOfNowhere Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) All the slides, reports, data etc http://www.bankofengland.co.uk/Pages/home.aspx Multiples of LTI report here: http://www.bankofengland.co.uk/pra/Documents/publications/cp/2014/cp1114.pdf Edited June 26, 2014 by R K Quote Link to post Share on other sites
andygivenup Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
TheCountOfNowhere Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by R K Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by R K Quote Link to post Share on other sites
little fish Posted June 26, 2014 Report Share Posted June 26, 2014 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. Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by R K Quote Link to post Share on other sites
@contradevian Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by aSecureTenant Quote Link to post Share on other sites
winkie Posted June 26, 2014 Report Share Posted June 26, 2014 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..... Quote Link to post Share on other sites
R K Posted June 26, 2014 Report Share Posted June 26, 2014 (edited) 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 June 26, 2014 by R K Quote Link to post Share on other sites
andygivenup Posted June 26, 2014 Report Share Posted June 26, 2014 Mass protests on the streets 4 weeks after printy printy I can see. Mass protests hehe, I like you your funny. Quote Link to post Share on other sites
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