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Killer Bunny

Ban H T B Gets A Good Shout In The Mirror

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How can anyone who lives in the real world disagree with that.....reaching a point where young working people in this country will no longer be able to independently live in it....what a mess.

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Help to Buy or Right to Buy?

"while economist Jonathan Davis points the blame at George Osborne’s Right to Buy scheme"

Personally I prefer Help Bail Banks instead of Help to Sell. Some people seem to think their mortgage payments are guaranteed, not that the bank gets bailed if they default.

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and theres me thinking a mortgage was all the help we needed to buy.

This is a mortgage PLUS another mortgage to buy.

If you think of it like this, you can see in an instant how finance is the driver for house prices. Not shortages, not excess demand, simply finance.

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It's a typo. It should say Help to Buy. Read JD's section.

BoE's 2014 "only 15% of mortgages can be greater than 4.5x household income" when at the time the average was only 3.2x - it's all about lending 4.5x household could be 9x single? It's never mentioned how banks have captured second incomes which is why families are struggling. Houses were £60k at 3x single now £200k at 4.5x household.

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and theres me thinking a mortgage was all the help we needed to buy.

This is a mortgage PLUS another mortgage to buy.

If you think of it like this, you can see in an instant how finance is the driver for house prices. Not shortages, not excess demand, simply finance.

THANK YOU!

I've been trying to get HPCers to see this for years.

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THANK YOU!

I've been trying to get HPCers to see this for years.

sometimes, it takes a new perspective on how things are sold to us.

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BoE's 2014 "only 15% of mortgages can be greater than 4.5x household income" when at the time the average was only 3.2x - it's all about lending 4.5x household could be 9x single? It's never mentioned how banks have captured second incomes which is why families are struggling. Houses were £60k at 3x single now £200k at 4.5x household.

You were the first person to draw attention to this accounting trick.

It makes a complete mockery of the BoE's claim to be regulating the commercial lenders.

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BoE's 2014 "only 15% of mortgages can be greater than 4.5x household income" when at the time the average was only 3.2x - it's all about lending 4.5x household could be 9x single? It's never mentioned how banks have captured second incomes which is why families are struggling. Houses were £60k at 3x single now £200k at 4.5x household.

+1, but I still get blank looks when I point this out to people!

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BoE's 2014 "only 15% of mortgages can be greater than 4.5x household income" when at the time the average was only 3.2x - it's all about lending 4.5x household could be 9x single? It's never mentioned how banks have captured second incomes which is why families are struggling. Houses were £60k at 3x single now £200k at 4.5x household.

I dont recall a 3x single limit anytime in my lifetime. Do you have a link to evidence for this?

I do recall Mr Lamont kindly pushing up my mortgage interest payments (temporarily) well into double figures however. What are current rates? 2-3%?

% household interest "captured" by banks is less now than under Lamont.

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I dont recall a 3x single limit anytime in my lifetime. Do you have a link to evidence for this?

I do recall Mr Lamont kindly pushing up my mortgage interest payments (temporarily) well into double figures however. What are current rates? 2-3%?

% household interest "captured" by banks is less now than under Lamont.

there never was any limit. There were however sensible lending guides...which with most banks was:

6 months good account management,

interviews with manager about how you proposed to manage the proposed mortgage, including doing a budget for the household, what would happen if the second mortgagee got pregnant, cover for sickness and so on.

Then, they would lend, as a guide..3 times the main earners income plus 1 times the spouse, providing the main earner was the one that wouldnt get pregnant...ie, the man. Sometimes more, sometimes less, but a Manager would be responsible for ensuring it was good for the borrower, and good for the bank.

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The Nationwide chart below is interesting showing how the ratio of house prices to average earnings increased since 1952 upto 2012 - from an implied figure of about 2 in 1952 to a crazy figure of about 8 at the peak in 2007. In 2012 it dropped to about 6 and I imagine now in 2016 (in London at least) it must be a mega crazy way up beyond the equivalent of the 8 times peak in 2007.

There's no bubble of course.

121028-1.jpg

Then there's the Nationwide chart below regarding the actual loans.

loan-to-income-ratios-and-house-prices%2

and another from Nationwide

.article-2181983-145240A8000005DC-793_634

You takes your choice.

Up up and away.

Edited by billybong

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I dont recall a 3x single limit anytime in my lifetime. Do you have a link to evidence for this?

I do recall Mr Lamont kindly pushing up my mortgage interest payments (temporarily) well into double figures however. What are current rates? 2-3%?

% household interest "captured" by banks is less now than under Lamont.

I certainly don't remember any period in which it was government responsibility to buy a 20-40% stake in houses owned by UK residents, depending on where they choose to buy. And, whilst I am almost old enough to remember British Steel, British Gas and British Leyland, I didn't expect British Home Loans to emerge as the biggest nationalised industry in European history. There is no housing market. There is just nationalisation of private debt, and a system of variable subsidies that determine house prices. As many BTL landlords are about to discover.

And I have no VI in this. It is unfair that many BTL owners are being arbitrarily shafted. It is equally unfair that other home sellers are being subsidised.

Just an opinion and observation.

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I certainly don't remember any period in which it was government responsibility to buy a 20-40% stake in houses owned by UK residents, depending on where they choose to buy. And, whilst I am almost old enough to remember British Steel, British Gas and British Leyland, I didn't expect British Home Loans to emerge as the biggest nationalised industry in European history. There is no housing market. There is just nationalisation of private debt, and a system of variable subsidies that determine house prices. As many BTL landlords are about to discover.

And I have no VI in this. It is unfair that many BTL owners are being arbitrarily shafted. It is equally unfair that other home sellers are being subsidised.

Just an opinion and observation.

Unfair ?

The BTL-ers bought out of free choice.

The savers and workers who are forced into subsidising this madness, that's where the unfairness lies.

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I do.

there never was any limit. There were however sensible lending guides...which with most banks was:

6 months good account management,

interviews with manager about how you proposed to manage the proposed mortgage, including doing a budget for the household, what would happen if the second mortgagee got pregnant, cover for sickness and so on.

Then, they would lend, as a guide..3 times the main earners income plus 1 times the spouse, providing the main earner was the one that wouldnt get pregnant...ie, the man. Sometimes more, sometimes less, but a Manager would be responsible for ensuring it was good for the borrower, and good for the bank.

+1

It wasn't written in law (as far as I know) but the multiple was generally accepted by lenders and generally applied as necessary for responsible lending.

Then there were the other unwritten rules for example that you had to regularly save with a lender for a specified period of time to show that you could make regular payments and to show you were responsible etc before a loan would be offered by that lender.

Edited by billybong

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Opening two lines of that Mirror article confuse Help to Buy and Right to Buy.

It seemed just a rightmove ramp....poushing initial asking prices like they are actual house prices.

Same old same old but at least someone in the MSM has raised the question on HTB.

There is clearly a seachange in the media, if only they'd left alone in 2012 then 2nd massive crash might have been averted.

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