Friday, Dec 01, 2006

6 x Salary Mortgages are OK says Merv!!

Times Online: Governor defends mortgage lending practices

It's all fine and we shouldn't worry. Lending 5 to 6 x annual salaries is not behaving in a dangerously irresponsible way says Governor of the BoE.

Posted by nearly30 @ 01:21 PM (441 views)
Add Comment
Report Article

16 Comments

1. paul said...

Oh dear. He was doing such a good job recently of appearing responsible, then he comes out with this kind of thing:

"He noted that the degree of mortgage arrears was now much lower than during the negative equity crisis of the Nineties."

The crucial difference being Mervyn, that we're not in a negative equity crisis (for the time being at least). So yesterday he warned us about the frothy asset market, particularly property and today he turns a blind eye to runaway HPI.

Confused?

Friday, December 1, 2006 01:29PM Report Comment
 

2. little professor said...

Today: "Mr King said that there was little risk of a repeat of the blight of negative equity after the house price slump that took place then, when many were left saddled with mortgages greater than their homes value."

Yesterday: The early 1990s crash in the commercial property market . . . was precipitated by rapid price and lending growth not dissimilar to that in evidence today,

Friday, December 1, 2006 02:03PM Report Comment
 

3. Sam said...

Well the multiples we saw in the 80's/90's were high in historical terms. Also lending was quite inflexible in the past. The 25 year figure for mortgages is more historical anecdote the stipulated law/rules, and comes from traditional building societies which pretty much became commercial banks over the last decade.

I don't see anything wrong with it, what I wouldn't like is if BTL'ers got these deals too. -- Which I'm sure they would.

Friday, December 1, 2006 02:09PM Report Comment
 

4. Dohousescrashinthewoods said...

>> 2. little professor said...
>> Today: [...]
>> Yesterday: [...]

Brilliant, LP. Nice to see someone with a longer memory than the press!

Friday, December 1, 2006 02:19PM Report Comment
 

5. waitingfor hpc said...

well i never - what a load of ********

so the couple i met last night who have bought a 2 bed flat for 259000 are doing good. They have joint mortage she earns 17000, and he probably about 40000. 6.4 times salary. So how come on an interest only mortage they are only just coping..... now.

Having just got married they want a family but can not afford for her to stop work. Well Merv that don't sound too healthy to me!!!!

Friday, December 1, 2006 02:24PM Report Comment
 

6. talking rot said...

The journalist behind this report is Gary Duncan who is not as much a turnip as David Smith - more of a parnip really.

Gary Duncan reported on 27 November 2006 that "Gordon Brown will escape office just in time - his successor will not have a pleasent time picking up the pieces." The article was basically about the economic mess Gordon Brown is currently avoiding by luck and tooth-skin.

Lending 5x or 6x salary is responsible during the good times. And if Crash Gordon's mess is discovered and the economy becomes sick, will 5x or 6x mortgages still be regarded are responsible in the future. I think not.

Friday, December 1, 2006 02:36PM Report Comment
 

7. jimmytennor said...

Unbelievable - this is the beginning of the end...

Friday, December 1, 2006 02:59PM Report Comment
 

8. inflation is eating my savings said...

Nothing unusual about this- one must make sure the bewildered herd remians confused- it makes them more malleable

Friday, December 1, 2006 04:01PM Report Comment
 

9. japanese uncle said...

As I have repeatedly menioned, this extraordinary remark by the BOE governor is just natural only if you know whose agent he is really. The agenda or hidden remit of the governors of all central banks in the industrialized countries is not at all, the welfare of those poor worthless mass, but how to facilitate the elite bankers" fleecing of those lamb to the slaughter. His attitude is not surprising at all.

Friday, December 1, 2006 04:13PM Report Comment
 

10. Cstanhope707 said...

Willing to put my money on either conclusion here!! Totally Currupt or Totally Incompetant.....

Merv a couple of points

[1] Did you get your qualifications through the Governments Adult Learning Center.

[2] Keep Interest Rates low fine, but the more money the sheeple have to put on there over inflated Mortgages the less they have to spend on other things, such as Goods and Services, which then leads to what's that word starting with"R"...

[3] Japan Population around 140 million available land for development very similar to the UK, Interest Rates virtually zero, Property Values out of control then Bang 65% plus drop in house prices.....

[4] Polish and other Eastern European workers will not bother with the UK as house prices increase back in Poland and other such countries. By the way unemployment in Poland is now virtually non existant it was around 50%.

Friday, December 1, 2006 06:10PM Report Comment
 

11. harold said...

RE: Battle of the lyrics

What's happened to glorious sunshine - I have some lyrics for him:

"I'm forever blowing bubbles,
Pretty bubbles in the air
They fly so high, nearly reach the sky
Then like my dreams they fade and die."

I'm Forever Blowing Bubbles
- Jaan Kenbrovin & John William Kellette 1919.

Friday, December 1, 2006 06:55PM Report Comment
 

12. millard said...

Harold, I suspect he has realised that he was out of his depth, unable to present a rational arguement, with only song lyrics and gloating to support his belief.

He may even have sat back, looked at his portfolio and realised that his exposure to the asset class needs to be reviewed.....

Friday, December 1, 2006 07:14PM Report Comment
 

13. nearly30 said...

Yes - am a bit saddened by Glorious's lack of signing on the forum recently..I suspect he's gone to Hawaii for a short break in-between his normal 80 hour weeks!!

I think Merv is doing a bit of plate spinning - trying to appease different groups through spinning the data/info.

He's a bit like Saddam's Media man.

As may favourite thinker Herbert Simon puts it:

"What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

Friday, December 1, 2006 07:51PM Report Comment
 

14. denzil said...

It was only a while back that King stated something to the effect of, House prices by anybody standards seem very high.
Now he seems to think the 6 * multiples are ok. The two statements, though not completely contradictory do seem to be a little at odds.

I think King has been on the sauce whilst enjoying the cricket as he appears to have lost his marbles.

Friday, December 1, 2006 08:22PM Report Comment
 

15. geed said...

Contradiction; contradiction, n.

1) The act of contradicting.
2) The state of being contradicted.
3) A denial.
4) A statement or proposition that contradicts or denies another or itself and is logically incongruous.
5) Inconsistency; discrepancy.
6) Something that contains contradictory elements.

What a pr!ck.

Saturday, December 2, 2006 03:35AM Report Comment
 

16. Ticktock said...

Ref - King, who was being quizzed by a Treasury Select Committee three weeks after interest rates were hiked to 5pc, didn't seem too worried about the rise in IVAs, saying 'so far our judgment is it is not going to affect the economy as a whole.


To be fair, what was he going to say having just raised rates? "Debt is a serious problem that threatens both the economy, and hundreds of thousands of households,and I have just made this problem worse"?

For me, all this statement shows is just how concerned about inflation (the real sort - which includes house prices) he is. Debt is clearly very serious at this time, but rates must still rise regardless because we have an even bigger 'elephant in the room'

Ref -"What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

Very true.

Saturday, December 2, 2006 07:20PM Report Comment
 

Add comment

  • If you do not have an admin password leave the password field blank.
  • If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines
Username  
Admin Password
Email Address
Comments

Main Blog | Archive | Add Article | Blog Policies