Should lenders take more responsibility?

[nina_c79]

No I don't suppose they are but they use to lend 125% mortgages to people and/or Mortages then went up over time on the assumption that your wage will increase.
Plain stupid mreally

The whole x6 and upwards multiples of your salary was ridiculous. But then again, the over-inflated house prices don’t match people’s salaries so for an ordinary family or a single person to even think about owning their property, is nigh on impossible. When I was looking to go for a mortgage about 18 months ago, I was told that I would be looking at needing between 30-40% deposit. Considering back in the day I remember folks were able to buy places with a couple of grand as deposit, and its likely that if I ever want to get a foot on the housing ladder I’m likely looking at a 40k deposit or above, it is very unfair.

[RudeKev]

Too true
When we paid £45 000 for our house bac in 92
We only needeed a £2000 deposit

Also mortgage was worked out as 2.5x 1 salary plus 1x 2nd salary

[SameOldStory]

No I don't suppose they are but they use to lend 125% mortgages to people and/or Mortages then went up over time on the assumption that your wage will increase.
Plain stupid mreally

The whole x6 and upwards multiples of your salary was ridiculous. But then again, the over-inflated house prices don’t match people’s salaries so for an ordinary family or a single person to even think about owning their property, is nigh on impossible. When I was looking to go for a mortgage about 18 months ago, I was told that I would be looking at needing between 30-40% deposit. Considering back in the day I remember folks were able to buy places with a couple of grand as deposit, and its likely that if I ever want to get a foot on the housing ladder I’m likely looking at a 40k deposit or above, it is very unfair.

thing is, income multiples don't tell the whole story.

Someone earning £15k per year is likely to have a lot less % of that £15k as disposable income, compared to someone earning £100k, so for the firs, 5x may be hard to afford the payments, but for the second 8x is affordable, but in the current climate, not achievable.

[nina_c79]

Too true
When we paid £45 000 for our house bac in 92
We only needeed a £2000 deposit

Also mortgage was worked out as 2.5x 1 salary plus 1x 2nd salary

My mum’s place is a 3 bed terraced house, £55k in 1996, she purchased it with a £2k deposit, next door’s property sold in March for £275k. Madness. Yes, that salary calculation you gave is probably the same as what she had. The house prices are still way over-inflated in my opinion.

[imatonkatoo]

.?

[whitbyfish]

It's a another smokescreen to deflect attention away from a government cheerleader of this mess.Brown maintained thar he had "ended boom and bust ",so we would have stable low interest rates.That enables lenders to take a much more relaxed view on affordability.

The big disaster in thw wings are the false dawn of ultra low emergency rates.Once the inflationary effects of recklessly low rates and qe kick in the mpc will end up having to jack rates through the roof to product a very weak pound.

It's not over yet

[Brucey]

I think half the problem with the credit crunch is the lack of regulation by the regulator (i.e. the FSA). It is far too easy to blame the banks for lending too much to people who can't afford to repay but where was the regulator in all this?

If the government are saying the banks should be more responsible then why didn't the regulator ensure they were being more responsible?

If the government (i.e. Brown) claim that banks bosses were just being greedy and trying to make as much money as possible without thinking of the consequences, why didn't the regulator stop them?

[angst]

2 years on from Northern Rock still we hear plenty of words,but that's it

[RudeKev]

Too true
When we paid £45 000 for our house bac in 92
We only needeed a £2000 deposit

Also mortgage was worked out as 2.5x 1 salary plus 1x 2nd salary

My mum’s place is a 3 bed terraced house, £55k in 1996, she purchased it with a £2k deposit, next door’s property sold in March for £275k. Madness. Yes, that salary calculation you gave is probably the same as what she had. The house prices are still way over-inflated in my opinion.

Oddly enough the house we brought was in the same street as one featured on 'Location location location' in 2006.
They were sellin for £170,000 and it's only a 2 bed terrace.
My niece lives in a small 1 bed flat valued at £110.000

[RudeKev]

It's a another smokescreen to deflect attention away from a government cheerleader of this mess.Brown maintained thar he had "ended boom and bust ",so we would have stable low interest rates.That enables lenders to take a much more relaxed view on affordability.

The big disaster in thw wings are the false dawn of ultra low emergency rates.Once the inflationary effects of recklessly low rates and qe kick in the mpc will end up having to jack rates through the roof to product a very weak pound.

It's not over yet

Too true,
First hint of a smell off a sniff off the 'Green shoots of recovery' and the interest rates wll soar up