Mortgage multiples

[PeanutButter]

Does anywhere track UK mortgage multiples? I have a feeling that borrowers who would have taken a comfortable 3.5x 2 years ago are desperately taking 5x or more these days in order to secure a property. 

It would explain the rising prices somewhat. 

[spyguy]

3 hours ago, PeanutButter said:

Does anywhere track UK mortgage multiples? I have a feeling that borrowers who would have taken a comfortable 3.5x 2 years ago are desperately taking 5x or more these days in order to secure a property. 

It would explain the rising prices somewhat. 

https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q1-2021

Chart 4

 

[PeanutButter]

4 hours ago, spyguy said:

https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q1-2021

Chart 4

 

Thanks, that Other category could do with a better breakdown methinks. 

[Notting Hell]

I think multiples can now reach 5.5x for single income over >£50,000/year.

Any brokers on here able to give insight?

[PeanutButter]

12 hours ago, Notting Hell said:

I think multiples can now reach 5.5x for single income over >£50,000/year.

Any brokers on here able to give insight?

Have a feeling HSBC offered us 6x earlier this year...

[Trump Invective]

13 hours ago, Notting Hell said:

I think multiples can now reach 5.5x for single income over >£50,000/year.

Any brokers on here able to give insight?

Interesting - that is a significant multiple for single income. What can 2 incomes do for you!? 

Edited July 28, 2021 by Trump Invective
Incorrect word

[spyguy]

13 hours ago, Notting Hell said:

I think multiples can now reach 5.5x for single income over >£50,000/year.

Any brokers on here able to give insight?

 

53 minutes ago, PeanutButter said:

Have a feeling HSBC offered us 6x earlier this year...

Hard to say.

On one hand the chart shows a lot at 4.0 and above - but doesnt break down how far above.

Then another shows 60^ of lending is 75% LTV or less.

This isnt an out of control mortgage market.

 Opposite

 

 

[PeanutButter]

17 minutes ago, spyguy said:

 

Hard to say.

On one hand the chart shows a lot at 4.0 and above - but doesnt break down how far above.

Then another shows 60^ of lending is 75% LTV or less.

This isnt an out of control mortgage market.

 Opposite

Thanks, scratch that theory out then.

[Freki]

Well income multiple is a bad metric. A 4.5 multiple at 3% interest rate is different to a 4.5 multiple at 1%.

I fixed my mortgage back in March, should I have waited till now, I would have had a 5% discount. You can fix for 5 years at 75% LTV at 1.3%. This is insane. 

[spyguy]

48 minutes ago, PeanutButter said:

Thanks, scratch that theory out then.

Its a really really weird market.

And has been in my area since ~2004.

For my area - houses are still at their ~2004 nominal prices. 20 years with no sticker price increase.

However the number of sales have been running at 30% of what was the normal market rate up till ~2002.

Sure, they doubled lates 90s to ~2002.

However ... that doubling appears to have come at the cost of crashing transactions.

if rates rise- which Im sure they will - then I can see places near me falling. A lot.

Its possible that the area is going to see houses selling for the same nominal value as they were in  the early 90s, before that boom fell like a brick.

30 years - with zilch increase; real prices down ~40%.

 

 

 

 

[spyguy]

23 minutes ago, Freki said:

Well income multiple is a bad metric. A 4.5 multiple at 3% interest rate is different to a 4.5 multiple at 1%.

I fixed my mortgage back in March, should I have waited till now, I would have had a 5% discount. You can fix for 5 years at 75% LTV at 1.3%. This is insane. 

Not really. You still have the capital to pay off.

Most people in London cannot afford to buy even if IRs are 0.

 

[dynamite red]

Nationwide offering up to 5.5 to first time buyers. 

https://www.nationwide.co.uk/mortgages/resources/helping-hand-mortgage

[Patfig]

52 minutes ago, spyguy said:

Its a really really weird market.

And has been in my area since ~2004.

For my area - houses are still at their ~2004 nominal prices. 20 years with no sticker price increase.

However the number of sales have been running at 30% of what was the normal market rate up till ~2002.

Sure, they doubled lates 90s to ~2002.

However ... that doubling appears to have come at the cost of crashing transactions.

if rates rise- which Im sure they will - then I can see places near me falling. A lot.

Its possible that the area is going to see houses selling for the same nominal value as they were in  the early 90s, before that boom fell like a brick.

30 years - with zilch increase; real prices down ~40%.

 

 

 

 

Which area is this?

[spyguy]

45 minutes ago, Patfig said:

Which area is this?

N. Yorks coast.

 

[Si1]

1 hour ago, spyguy said:

Its a really really weird market.

And has been in my area since ~2004.

For my area - houses are still at their ~2004 nominal prices. 20 years with no sticker price increase.

However the number of sales have been running at 30% of what was the normal market rate up till ~2002.

Sure, they doubled lates 90s to ~2002.

However ... that doubling appears to have come at the cost of crashing transactions.

if rates rise- which Im sure they will - then I can see places near me falling. A lot.

Its possible that the area is going to see houses selling for the same nominal value as they were in  the early 90s, before that boom fell like a brick.

30 years - with zilch increase; real prices down ~40%.

 

 

 

 

Lots and lots of zombie boomer households. Can't sell. Not forced to sell.

[Patfig]

5 minutes ago, spyguy said:

N. Yorks coast.

 

Carlin How is still cheap as chips

[spyguy]

48 minutes ago, dynamite red said:

Nationwide offering up to 5.5 to first time buyers. 

https://www.nationwide.co.uk/mortgages/resources/helping-hand-mortgage

Well ......

Most FTBs are getting HTB junk.

Only a tiny tiny number of FTBers would quality.

Most couples with a joint income of 50k wont be living in areas where they can get a 275k house.

50k joint, credit-virgo inacto, 10% (so ~30k cash deposit).

 

 

A couple, who are eligible first time buyers, have a joint income of £50,000, a 10% deposit and no other costs impacting how much they can afford. With a Helping Hand, they may be able borrow up to £275,000. This is compared to the £225,000 they’d be able to borrow without one.

 

To be eligible for a Helping Hand you need to:

• be a first time buyer. To us, this means you will not have had a mortgage in the last 3 years. If applying jointly, both applicants need to be first time buyers.
• have at least 10% deposit.
• take out a 5 or 10 year fixed rate mortgage.

 

You will not be eligible if you, or anyone you’re applying with, are:

• self-employed.
• using an affordable home ownership scheme such as Help to Buy, shared ownership, Right to Buy or Forces Help to Buy.

[spyguy]

1 minute ago, Patfig said:

Carlin How is still cheap as chips

The local trend seems to be - 

Social housing - Pickering, doing your TC/UC hours at the car plastics or Flamingo land.

Aspiring Yuppie home owner - Greater Loftus. By car is not that far away - quick ~30minute whiz down the cost.

However .... you will never ever ever get your money back. Youll be lucky to sell.

 

 

[erat_forte]

1 hour ago, spyguy said:

Not really. You still have the capital to pay off.

Most people in London cannot afford to buy even if IRs are 0.

 

So is there a practical limit to income multiples? Could we have 20x if interest rates go negative enough?

[spyguy]

1 minute ago, erat_forte said:

So is there a practical limit to income multiples? Could we have 20x if interest rates go negative enough?

I think its the percentage of income left after paying the mortgage.

MMR stipulatyes that mortgage payment must not take more than ~30% of income.

Now there may be couples with lower than average spending - 1 car, no OTT holidays.

Thats leaves the bank some room to lend more.

[Patfig]

11 minutes ago, spyguy said:

The local trend seems to be - 

Social housing - Pickering, doing your TC/UC hours at the car plastics or Flamingo land.

Aspiring Yuppie home owner - Greater Loftus. By car is not that far away - quick ~30minute whiz down the cost.

However .... you will never ever ever get your money back. Youll be lucky to sell.

 

 

For sure you will never get your money back, even Saltburn seems to be struggling

[spyguy]

7 minutes ago, Patfig said:

For sure you will never get your money back, even Saltburn seems to be struggling

https://houseprices.io/?q=carlin+how

[Patfig]

1 minute ago, spyguy said:

https://houseprices.io/?q=carlin+how

Wow there's a house over £100K 🙂

 

[Smiley George]

FWIW, caught up with our IFA earlier this week - he' saying that up 5.5x joint income is no real issue at 80% LTV and below, for most high street lenders.

I've no idea what's feeding this housing bubble 🤔

[msi]

38 minutes ago, Smiley George said:

FWIW, caught up with our IFA earlier this week - he' saying that up 5.5x joint income is no real issue at 80% LTV and below, for most high street lenders.

I've no idea what's feeding this housing bubble 🤔

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