at last some positive news on housing 3x caps

Can only mean house prices will HAVE to fall in order to get people on the ladder..

Great if you want to get on the ladder, but not so great for those that are trying to sell.

Buyers are as much to blame as the lenders in that respect, houses are simply not "worth" that much.
 
This is ridiculous, how will anybody afford anything, and what will the hundreds of thousands of people with large mortgages do when it comes to re mortgage time?
 
Over regulation that comes well after the time intervention may have been useful and will kill off any recovery, genius.
 
What a fantastically misguided piece of state interference at a time when the economy has enough problems already...
 
Jez said:
This is ridiculous, how will anybody afford anything
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By saving? Supply and demand (reduced 'demand' - read 'affordability') will force prices for things such as houses down to a new 'affordable' level.

Jez said:
and what will the hundreds of thousands of people with large mortgages do when it comes to re mortgage time?
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I would imagine that it would only apply to new mortgages.

I just can't see this scheme working though. It would force house prices down dramatically, almost instantaneously. Very few existing owners could 'afford' to sell, as they would almost certainly end up in negative equity, because the price the buying market could afford to pay would be hugely reduced.
 
div0 said:
I just can't see this scheme working though. It would force house prices down dramatically, almost instantaneously. Very few existing owners could 'afford' to sell, as they would almost certainly end up in negative equity, because the price the buying market could afford to pay would be hugely reduced.
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As an owner of 2 properties, and a co owner of a growing number of others, this is what i am scared of. I do not trust the government to have thought far enough ahead as to not screw over thousands of people.
 
Oh dear - this looks like a whole lot of trouble brewing.
I have got a very modest mortgage and the 3x cap will not even cover me come remortgage time (due very soon!!)
 
There is no way anyone can afford to get a place if they are on less than £40k a year these days if you can only borrow 3x the salary ! With average house prices way over £100k in most places, how would a policeman, teacher, or anyone who is single going to get a house?

The only way to do it is get a crappy flat, and hope the market picks up so you can trade up, which is unlikely as the cap will keep the price down.
 
I agree in principle to a 'cap' on mortgages to sensible limits (eg not 100%, and a sensible income multiple), however if this was to be implemented it should've been done years ago, before 6x income and >100% mortgages became the standard and house prices got really silly...

There is no way for this to not screw over all the people that have used property as an investment, or those that need to sell, average wage is approximately £20,000, so even a couple both earning the average will get £120k mortgage and have to come up with a deposit, yet the average house price is still £150k ish so that's a further £24k that the average house will have to lose before it hits the very top that the average couple can buy...
 
I imagine 'exceptional circumstances' will cover the majority of London, where you have early-mid 20s individuals and couples with no dependents or significant bills earning £30-40k plus each, so have an absolute shed-load of disposable income.

I.e. a couple on £30k each should be able to get a £300k mortgage, which is pretty much about how things were anyway.

For example, a £300k mortgage is £1,500 a month at 5% over a 40 year term. If you have a couple on £30k each, you're looking at a joint net income of £3,600 or so, leaving more than enough disposable income to a) cover increases or b) live a very nice life
 
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FishFluff said:
No, it just means you'll need a far bigger deposit in order to buy anything.
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Which no-one will have because most people have their money tied up in property already, or will have to use savings to offset the massive loss in value of the property.

This will only have one result and that's to completely destroy the economy better than Labour have ever managed before, and as they pretty much bankrupted the country last time they were in power, that's quite an achievement...
 
good news i think, will force house prices down to sensible levels. Having uncapped lending only forced the house prices up to silly levels, which the banks and lenders loved as its more money in their pockets.

I find it sad that people thought it so important to get on the property ladder they were prepared to be crippled by paying over the odds.
 
jonesy said:
I find it sad that people thought it so important to get on the property ladder they were prepared to be crippled by paying over the odds.
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This will cripple everyone who has bought since 1995 or so with negative equity... How is that possibly a good thing? If we're looking at average house prices of 3x the average income, the average house price has to drop by over £100k... We're talking a 60-70% reduction in value, that's not just going to impact people who bought at the top of the boom, that's going to impact everyone massively. It's an absolutely insane and ludicrous policy that can only have been concieved by a complete halfwit as a good idea to do now, it's at least 10 years too late to have positive effects.
 
5x would have been good years ago, 3x is way too low. Can't say I feel sorry for the investors that stand to lose money after they pushed up the prices so high.
 
Dolph said:
This will cripple everyone who has bought since 1995 or so with negative equity... How is that possibly a good thing? If we're looking at average house prices of 3x the average income, the average house price has to drop by over £100k... We're talking a 60-70% reduction in value, that's not just going to impact people who bought at the top of the boom, that's going to impact everyone massively. It's an absolutely insane and ludicrous policy that can only have been concieved by a complete halfwit as a good idea to do now, it's at least 10 years too late to have positive effects.
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What else would you expect from the former head of a student Conservative Association and lifetime banker/management consultant

Damn Labour :mad:
 
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