Thursday, October 19, 2006

FTBs ‘mortgaging future’

First time buyers 'mortgaging their future' with interest only mortgages on ridiculously high income multiples

First time buyers 'mortgaging their future' with interest only mortgages on ridiculously high income multiples. As mortgage lending still increases month-on-month to record levels and property prices continue to defy gravity, do we see any let up or reasons for concern, or are some cracks beginning to appear...Colin Sloss is head of business development at The Exchange..

Posted by converted lurker @ 10:17 AM (1836 views)
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3 thoughts on “FTBs ‘mortgaging future’

  • little professor says:

    While I agree with some of his points, the article itself is dross – he is clearly a VI interested in pushing us to invest in the stock market

    “Positive sentiment is gradually returning and world stockmarkets now look an attractive medium and longer-term haven for client money. Equity investment looks good value in comparison, and for those high-rate taxpayer clients of yours and ‘buy to let’ investors, seeking a retirement nest egg, a parting thought; would they be interested in an investment with a similar upside and potentially healthy retirement income, with 40% tax relief on their investments to boot?”

    Colin Sloss is head of business development at The Exchange. Say no more.

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  • I really don’t understand the last sentence. I assume the phrase “an investment with a similar upside” refers to equities, but what is the upside similar to? “buy to let” – but he has just said those have peaked and have a low yield. And the 40% tax relief, is that refering to ISAs, or something more exotic like an Enterprise Investment Scheme (EIS)? Also, the phrase “high-rate taxpayer clients of yours” leads me to believe that this article has been mixed up with some letter because the general readership doesn’t have clients, high-rate or otherwise.

    I think we would all be interested in an investment with healthy income and 40% tax relief but unless we can have a bit more care in the presentation I think we will have to give it a miss.

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  • You can’t really borrow more than 5 x your income and it is easy to repay interest only on a decent mortgage at that ammount. If somebody borrowed 10 x their income I could see a problem. I think banks should really stop the multiple thing altogether and work out what each individual can afford to repay. Some people with no other outgoings or kids could probably afford a lot more than 5 x salary multiple.

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