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FSA to cap mortgage borrowing

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    FSA to cap mortgage borrowing

    http://www.telegraph.co.uk/finance/p...borrowing.html

    "FSA to cap mortgages at max 3 times salary and min 5% deposit."

    Is this not going to drive down the price of houses ?

    average salary = 24,000 (Aug 2008)

    Max mortgage for a single is now 72,000 + 3600 for the deposit.

    I assume that they will allow some contribution from the partner but if it was as when I bought my first house then that was just X1

    That would make it £96000 top whack for Mr and Mrs average.

    I do not see this working for years - all that will happen is people will not be able to move.
    "All around me I see chaos and confusion, my work here is done...."

    #2
    Stable

    And as it is bound to be posted

    Stable door.
    "All around me I see chaos and confusion, my work here is done...."

    Comment


      #3
      Originally posted by bren586 View Post
      http://www.telegraph.co.uk/finance/p...borrowing.html

      "FSA to cap mortgages at max 3 times salary and min 5% deposit."

      Is this not going to drive down the price of houses ?

      average salary = 24,000 (Aug 2008)

      Max mortgage for a single is now 72,000 + 3600 for the deposit.

      I assume that they will allow some contribution from the partner but if it was as when I bought my first house then that was just X1

      That would make it £96000 top whack for Mr and Mrs average.

      I do not see this working for years - all that will happen is people will not be able to move.
      Yes it will. Luckily though, house prices are not included in the govt's favourite inflation measure, so we're still not experiencing deflation
      "Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny. "


      Thomas Jefferson

      Comment


        #4
        Madness.

        My salary is 400 quid a month. I think that should get me a lockup down a lane.

        Comment


          #5
          Originally posted by bren586 View Post
          And as it is bound to be posted

          Stable door.
          It is the bumper mortgages that lenders have been prepared to lend (because it is different with low interest rates), along with inflated self-sert mortgages that has kept the housing bubble going for as long as it has.

          Vendors hoping that the current downward movement in prices was a temporary blip will have to revise their expectations somewhat.

          Comment


            #6
            I made an offer on a house at the weekend, less than 10% below asking price, cash purchase. Vendors came back 5 minutes later saying they will only accept offers over the asking price.

            To buy the house I was looking at would require a salary of over £250K pa. under the new rules.

            Comment


              #7
              Who cares what first time buyers do? It seems only cash buyers can compete.

              We need a tax on second homes.....

              Comment


                #8
                Originally posted by BrilloPad View Post
                Who cares what first time buyers do? It seems only cash buyers can compete.

                We need a tax on second homes.....
                More tax is not the solution to every problem.
                ‎"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."

                Comment


                  #9
                  Originally posted by BrilloPad View Post
                  We need a tax on second homes.....
                  Possibly.....but that would need to be handled very carefully, otherwise the rental sector would suffer a collapse too because people would just try to pass the tax onto tenants.
                  Is God willing to prevent evil, but not able? Then he is not omnipotent. Is he able, but not willing? Then he is malevolent. Is he both able and willing? Then whence cometh evil? Is he neither able nor willing? Then why call him God? - Epicurus

                  Comment


                    #10
                    Originally posted by BrilloPad View Post
                    We need a tax on second homes.....
                    Wouldn't that be Stamp Duty? On the assumption that the cost of an average persons first home is under the stamp duty threshold.
                    If at first you don't succeed... skydiving is not for you!

                    Comment

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