Thursday, March 15, 2012

Comedy of Mortgage Lenders best ever gag (it’s they way they tell ’em)

Renting and buying face off in CML’s survey

"Buying a home is still cheaper than renting, but only if the deposit required to take out a mortgage is taken out of the equation", according to the Council of Mortgage Lenders.In an eight-page research paper, To Buy or Not to Buy, the CML calculated the costs of owning compared to renting, using data from the Valuations Office Agency and its own regulated mortgage survey. James Tatch, CML analytics manager and author of the research, said if the need for a hefty deposit is ignored, buying was cheaper than renting a similar property across all borrowing types, and across all regions of the UK. He said this was not surprising, considering that a typical deposit might be 25 per cent.

Posted by jack c @ 11:46 AM (1557 views)
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8 thoughts on “Comedy of Mortgage Lenders best ever gag (it’s they way they tell ’em)

  • Hilarious, its like saying a 60K car is as affordable as as a 20k one, total rubbish.

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  • mark wadsworth says:

    This is a textbook Home-Owner-Ist one-two:

    One: Buying is cheaper than renting, plus you’ve got great capital gains, something for retirement, leave to your children etc.

    Two: Buying properties to rent out is a great source of income, plus you’ve got great capital gains etc.

    So who is in his right mind is going to rent? They fail to realise that this is all a negative-sum game; for every tenant there must be a landlord. For every “canny investor who has seen his retirement fund depleted by inflation and Gordon Brown’s pensions grab and now wants to invest in bricks and mortar” there must be somebody denied the opportunity to get a tax-free income for life.

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  • “author of the research, said if the need for a hefty deposit is ignored, buying was cheaper than renting a similar property across all borrowing types, and across all regions of the UK.”

    If the author of this report is ignored….

    Both renting and buying a home is too expensive, we have little left at the end of the month to buy things with and that is why the country is in a such mess. There can be no economic recovery in the UK until housing becomes more affordable.

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  • The report assumes owners have an interest only mortgage and fails to mention the effect of 0.5% base rate.

    They fail to mention the capital downside risks associated with owning a house.

    It is these kinds of assumptions that got us into the credit bubble but they know of no alternative.

    I think something is about to hit the fan.

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  • @Will – smouldering away beneath the surface of the housing market are things that the public at large never see or hear of until such time as you suggest the proverbial hits the fan

    Current example “Lenders lobby FSA to get round MMR advice plan”

    Lenders are believed to be lobbying the Financial Services Authority to exempt hundreds of their call centre staff from having to be CeMAP qualified to offer advice. The FSA’s final Mortgage Market Review consultation paper specifies that brokers and lenders will no longer be able to offer customers mortgage products on a non-advised basis. Under the proposals mortgages must be offered on either an advised basis or execution-only.Consumers can request an execution-only sale if they know precisely what they want to buy or if they are a mortgage professional or high net-worth client.

    Full article @ http://www.mortgagestrategy.co.uk/lenders-lobby-fsa-to-get-round-mmr-advice-plan/1047766.article

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  • Jack @4

    If the FSA agree to let call centre staff to give financial advice without qualifications, it could have a knock on effect for all IFAs.

    The race to the bottom?

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  • Will – the FSA are actually raising the bar on qualifications, so to sanction what the lenders are suggesting would be a reversal of current trends, however the whole financial services industry (as they like to call it) is sinking rapidly under the weight of red tape and cost of regulation. By 2014 you might find IFA’s in the same bracket as the Dodo and passenger pigeon.

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  • To make it a fair comparison the renter should be assumed to have the deposit deposit sum in an investment account returning 5%(?), then have the investment return deducted from their renting costs.

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