This last week i have seen three really large nails driven into the property market
Regulator comes out and has imposed rules on what the banks can and cannot lend. i used to be able to get 6-8 times salary, now its 4 tops
2.House prices to be correctly advertised going forward in local press, should help remove the belief that prices are stable
3.Banks increasing intrest rates and removing spurious products (100% Morts.) from market.
these three have as i see become visable in the last few weeks.
the affect on house prices should be brutal. If you were savvy enough to rip the arse put of your asking price early in the year and gone sale agreed, then you are lucky. going forward, if you need to sell from now on, your screwed if your expecting anything like recent price levels.
i did a quick calculation on my house,:
i bought in 2002 for 200k
factor in intrest and its equivelent in todays money to 240k
Max Mort i can get on the online calculators this week is 230k
so i can no longer afford my house, even though my salary has been stable.
my observation. prices to go to 2002 levels and fast
just checked the one online calculator but this crowd will give me 5.4 times my salary and bonus combined (I assumed 10% bonus but this is in no way guaranteed in my job) i.e. they’ll lend me 5.4 x (salary+10%) or 6x my salary ignoring bonus
Superpiper doesn’t seem to be logged on at the min.
I’ve asked this question before but couldn’t find an answer - what power does the Central Bank have to restrict lending multiples (of salary) or LTV’s (100%)??
sorry, i didn’t mean that a regulator is restricting the market to 4 time salary,
I was listening to Today fm on the way home last week and a official body (not sure which) was describing how the banks have to follow certain rules now to give out mortgages (ie play nice)
The woman mention credit assesments being compulsory.
i have (maybe incorrectly) corrolated this to the multiple now being offered on the web calculators being dramatically reduced.
Matt was going off on one about the stable door etc but to me it seems that as of autumn last year, the regulators have but the brakes on the banks.
Matt was as suprised as i was to hear of this so late.
And the article prompted me to find out just what i can borrow.
sorry for the confusion, i’ll try to find some links
My reading of the situation is that the banks are now effectively self-regulating (after the horse has bolted) But it’s also my opinion that the Central bank should have acted years ago to restrict borrowing when it saw the emerging bubble - but that the Central Bank Could not or Would not act.