any Govt interference in lending is wrong. Houses have been overpriced by up to 20% for some years due to easy availability of mortgages. People are still buying houses beyond their means 'because they can borrow the money'. They don't think about the 'what ifs' of raised interest rates, illness, etc.. If the market were left to market forces it would all settle down within a year or two and prices would be more in tune with true house values. People should be given guidance on what they can really afford when buying houses.
Nationally there is no housing boom . What you have at present is a totally fragmented market with large areas of the country where prices have risen at reasonable rates and in some instances not at all . London and surrounding area is now so out of kilter with the rest of the country that trying to work out average national house price figures no longer makes any sense . Not sure what lessons have been learned when banks are implementing lending criteria which apply equally to borrowers in London and the north of Scotland .
I do not get this one size fits all attitude taken . Having recently applied for a mortgage whilst in semi retirement most mortgage lenders are reluctant to lend to us because on multiple income basis we fall short on their one size fits all basis. Despite having other assets valued at around £1.8m and only wanting to borrow £360000 on a £875000 property we were turned down by a number of providers. Who is the safest bet us with substantial equity or someone who has a higher income but could easily loose their job at any time .The selection criteria is crazy as there is no way we would default on a £360000 mortgage and put our other assets at risk. So basing lending criteria purely on current income basis which by the way is often manipulated will have very little influence on whether someone defaults or not. Fortunately there are specialist mortgage providers such a Scottish Widows who look beyond the one size fits all basis which are getting good quality customers at the expense of the likes of the RBS
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