Brendan Burgess
Founder
- Messages
- 52,177
The ordinary borrower who has saved up 10% and wants to borrow 4 times their salary will not be able to get a loan. The banks can make some exceptions, but they won't be able to make exceptions for all those borrowers.
The problem is that the interest on a mortgage is often cheaper than the rent for a similar property. So it makes sense to buy with a mortgage than to rent.
If house prices are "normal" , i.e. not rising by 20% a year, then this waiting won't matter too much. But it will cause intense frustration if people expect house prices to rise over the coming years.
I think it makes sense from the prudential point of view to stop lenders outcompeting each other to lend much higher LTVs. But it will delay a lot of people getting onto the housing ladder.
The problem is that the interest on a mortgage is often cheaper than the rent for a similar property. So it makes sense to buy with a mortgage than to rent.
If house prices are "normal" , i.e. not rising by 20% a year, then this waiting won't matter too much. But it will cause intense frustration if people expect house prices to rise over the coming years.
I think it makes sense from the prudential point of view to stop lenders outcompeting each other to lend much higher LTVs. But it will delay a lot of people getting onto the housing ladder.