rantnrave Posted February 13, 2015 Share Posted February 13, 2015 (edited) Major lender cuts amount it will lend to first-time buyers Santander is today cutting its lending limit from five times to four-and-half times salary for first-time buyers. It means that a first-timer earning £40,000 will not be able to borrow £200,000 any more, but a maximum of £180,000. The move by Santander follows Barclays which last month cut its limit from five-and-a-half times income to four-and-a-half times income for all borrowers. The new caps on lending limits come as mortgage rates have fallen to record lows. Santander will continue to offer loans of up to five times salary for home movers. Andrew Montlake, of mortgage broker Coreco, said: “The changes will hit buyers in London the most, and particularly first-time buyers.” http://www.propertyindustryeye.com/major-lender-cuts-amount-will-lend-first-time-buyers/ As always, no clarification whether this is single or joint incomes... Edited February 13, 2015 by rantnrave Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 13, 2015 Share Posted February 13, 2015 It's different this time Quote Link to comment Share on other sites More sharing options...
Quicken Posted February 13, 2015 Share Posted February 13, 2015 They need to keep the proportion of loans granted over 4.5 times income below 15 percent. Perhaps that's why. http://www.thisismoney.co.uk/money/article-2670424/Bank-England-set-announce-stricter-mortgage-rules-cool-overheating-housing-market.html Economists had expected the Bank's Financial Policy Committee, chaired by governor Mark Carney, could limit the amount that homeowners could borrow more widely. Business Secretary Vince Cable said recently that a level of three to three-and-a-half times income was an appropriate level. The measures announced today will have a less dramatic effect and will not outlaw loans worth more than 4.5 times income completely, but only keep their number to 15 per cent of new mortgages. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted February 13, 2015 Share Posted February 13, 2015 They need to keep the proportion of loans granted over 4.5 times income below 15 percent. Perhaps that's why. http://www.thisismoney.co.uk/money/article-2670424/Bank-England-set-announce-stricter-mortgage-rules-cool-overheating-housing-market.html If you draw a summary diagram of their loan book, would it resemble a pyramid ? Quote Link to comment Share on other sites More sharing options...
smiley Posted February 13, 2015 Share Posted February 13, 2015 Is discrimination against FTBs like this potentially racist/ageist? FTBs are more likely to be young and non-white, so refusing to allow them to have the easy deals other people can access is racist and ageist, no? Quote Link to comment Share on other sites More sharing options...
Quicken Posted February 13, 2015 Share Posted February 13, 2015 Is discrimination against FTBs like this potentially racist/ageist? FTBs are more likely to be young and non-white, so refusing to allow them to have the easy deals other people can access is racist and ageist, no? Ageism against the young is state sanctioned. Quote Link to comment Share on other sites More sharing options...
Quicken Posted February 13, 2015 Share Posted February 13, 2015 So, slowly reverting back to norm. How much are they allowed to lend to BTL scum? As much as they like I think; not regulated. Quote Link to comment Share on other sites More sharing options...
spyguy Posted February 13, 2015 Share Posted February 13, 2015 Its Santander. They don't have a pot to p1ss in. Or a d1ck to p1ss with.Or a hand to hold the d1ck with. Quote Link to comment Share on other sites More sharing options...
rantnrave Posted February 13, 2015 Author Share Posted February 13, 2015 Its Santander. They don't have a pot to p1ss in. Or a d1ck to p1ss with. Or a hand to hold the d1ck with. But they do have some freshly printed Euros courtesy of the ECB... Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted February 13, 2015 Share Posted February 13, 2015 They need to keep the proportion of loans granted over 4.5 times income below 15 percent. Perhaps that's why. Certainly in Barclays' case that could well have been the reason. In mid-Jan Barclays restricted loans above 80% LTV to a 4.5x income cap. Then just a week later it capped all mortgages at 4.5x. A few days after that it loosened its lending criteria on BTL mortgages. From the press release: Barclays announces boost to Buy-To-Let From today (26 January), purchasing a Buy-To-Let property with Barclays is made more accessible for many would-be landlords thanks to the introduction of a new approach that allows personal income to be accepted when assessing Buy-To-Let affordability. Following a successful pilot conducted last year, Barclays will now allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income. http://www.newsroom.barclays.co.uk/releases/ReleaseDetailPage.aspx?releaseId=3104 Quote Link to comment Share on other sites More sharing options...
Saver Posted February 13, 2015 Share Posted February 13, 2015 Is discrimination against FTBs like this potentially racist/ageist? FTBs are more likely to be young and non-white, so refusing to allow them to have the easy deals other people can access is racist and ageist, no? I think indirect discrimination is legal - universities routinely advertise jobs saying you must be within X years of graduating with a PhD. They don't seem to run into any problems with that being discriminatory against older people! Quote Link to comment Share on other sites More sharing options...
Digsby Posted February 13, 2015 Share Posted February 13, 2015 Following a successful pilot conducted last year, Barclays will now allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income. Hahaha - if that doesn't tell you that the BTL "business" proposition has become nothing more than a leveraged bet on the future of house prices, nothing will. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 13, 2015 Share Posted February 13, 2015 Better that bu Better that BTLers have to use some of their own income to service a BTL mortgage. In other news, passers-by have been grabbed off the streets to augment BTL applicants income potential...Kidnap to buy to let is the new thing. Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted February 13, 2015 Share Posted February 13, 2015 In other news, passers-by have been grabbed off the streets to augment BTL applicants income potential...Kidnap to buy to let is the new thing.Please substitute renters for passers-by. As it is income of renters that defines rental income. Whether it be earned or not. Quote Link to comment Share on other sites More sharing options...
Sancho Panza Posted February 13, 2015 Share Posted February 13, 2015 Certainly in Barclays' case that could well have been the reason. In mid-Jan Barclays restricted loans above 80% LTV to a 4.5x income cap. Then just a week later it capped all mortgages at 4.5x. A few days after that it loosened its lending criteria on BTL mortgages. From the press release: Barclays announces boost to Buy-To-Let From today (26 January), purchasing a Buy-To-Let property with Barclays is made more accessible for many would-be landlords thanks to the introduction of a new approach that allows personal income to be accepted when assessing Buy-To-Let affordability. Following a successful pilot conducted last year, Barclays will now allow any shortfall in the rental income used to calculate affordability to be met by the applicant’s disposable income. http://www.newsroom.barclays.co.uk/releases/ReleaseDetailPage.aspx?releaseId=3104 To be fair,they may well be collateralizing the mortgagors residential home on the BTL,particualarly if there's no charge on it. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 13, 2015 Share Posted February 13, 2015 Please substitute renters for passers-by. As it is income of renters that defines rental income. Whether it be earned or not. no, thats just for the mortgage...renters?...who cares if it doesnt rent if you and a friend are making the payments? Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 13, 2015 Share Posted February 13, 2015 To be fair,they may well be collateralizing the mortgagors residential home on the BTL,particualarly if there's no charge on it. doesnt matter if they dont, if the thing goes TU, with ANY debt, your home can have the debt attached later. There is no such thing as an unsecured loan when it all goes TU. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted February 13, 2015 Share Posted February 13, 2015 It means that a first-timer earning £40,000 will not be able to borrow £200,000 any more, but a maximum of £180,000. http://www.propertyindustryeye.com/major-lender-cuts-amount-will-lend-first-time-buyers/ As always, no clarification whether this is single or joint incomes... It's whatever income is put on the mortgage application, which masks how much more expensive houses are compared to historical averages. Say 2 x £20k earners getting that £40k household income and the borrowing is now £180k Using 1998 lending criteria (not wages) at 3x Main income plus 1x Second income borrowing would be £80k There's your HPI right there... so where do people buying now think the same HPI is going to come from this time? How many houses bought on one income are there left to be bought by debt slave saps using two incomes? At 4.5x or 5x joint income, instead of the increased lending multiples of the past, it's all going to be down to wage rises, which if they occurred with any significance might lead to interest rates rises which increases monthly mortgage payments? She cannae take anymore cap'n? Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted February 13, 2015 Share Posted February 13, 2015 no, thats just for the mortgage...renters?...who cares if it doesnt rent if you and a friend are making the payments?If Lie to Let makes inroads into the 'market' things are even worse than we think. Quote Link to comment Share on other sites More sharing options...
Democorruptcy Posted February 13, 2015 Share Posted February 13, 2015 If Lie to Let makes inroads into the 'market' things are even worse than we think. Help to Let next? If the Governbankment doesn't get increased house sales, it will use it's balance sheet, to underwrite lending by banks to aspirational landlords. It's comply or die. Not that long ago Osborne's masterplan was to have pension funds go into BTL on a huge scale. They refused, so his plan B was to take the money off them and he has released pension funds, so pensioners can get into BTL instead of pension fund managers. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted February 13, 2015 Share Posted February 13, 2015 It's whatever income is put on the mortgage application, which masks how much more expensive houses are compared to historical averages. Say 2 x £20k earners getting that £40k household income and the borrowing is now £180k Using 1998 lending criteria (not wages) at 3x Main income plus 1x Second income borrowing would be £80k There's your HPI right there... so where do people buying now think the same HPI is going to come from this time? How many houses bought on one income are there left to be bought by debt slave saps using two incomes? At 4.5x or 5x joint income, instead of the increased lending multiples of the past, it's all going to be down to wage rises, which if they occurred with any significance might lead to interest rates rises which increases monthly mortgage payments? She cannae take anymore cap'n? As a matter of interest, the Central Bank of Ireland put its LTI cap at 3.5x in the macroprudential regs it finalised a couple of weeks ago, although its allowing a slighter higher proportion of the mortgage book to exceed this limit than the FPC settled upon (20% vs 15%). http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankannouncesnewregulationsonresidentialmortgagelending.aspx Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted February 13, 2015 Share Posted February 13, 2015 If Lie to Let makes inroads into the 'market' things are even worse than we think. Lie to let.let me count the ways> gifted deposit. Below Market Value Windmilling equity. Quote Link to comment Share on other sites More sharing options...
Guest_northshore_* Posted February 13, 2015 Share Posted February 13, 2015 Help to Let next? If the Governbankment doesn't get increased house sales, it will use it's balance sheet, to underwrite lending by banks to aspirational landlords. It's comply or die. Not that long ago Osborne's masterplan was to have pension funds go into BTL on a huge scale. They refused, so his plan B was to take the money off them and he has released pension funds, so pensioners can get into BTL instead of pension fund managers. Already begun: https://www.gov.uk/government/news/thousands-of-tenants-set-to-benefit-from-deposit-loans Quote Link to comment Share on other sites More sharing options...
19 year mortgage 8itch Posted February 13, 2015 Share Posted February 13, 2015 Already begun: https://www.gov.uk/government/news/thousands-of-tenants-set-to-benefit-from-deposit-loansIn my locality, rental deposits are a months rent + £100. I'm expecting this to rise considerably. Quote Link to comment Share on other sites More sharing options...
FreeTrader Posted February 13, 2015 Share Posted February 13, 2015 Already begun: https://www.gov.uk/government/news/thousands-of-tenants-set-to-benefit-from-deposit-loans Was just about to post the same. Also: £55 million deal will mean 800 new homes for rent in Greater Manchester Housing Minister Brandon Lewis today (10 February 2015) announced a multi-million pound deal that will provide nearly 800 homes specifically for private rent in Greater Manchester. The minister welcomed this latest deal through the government’s £1 billion Build to Rent scheme, which is well on track to build 10,000 new homes for private rent. https://www.gov.uk/government/news/55-million-deal-will-mean-800-new-homes-for-rent-for-manchester Quote Link to comment Share on other sites More sharing options...
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