Central bank purposes new mortgage protection rules

KomradeBishop

_Kaiser_ wrote: »

Agree, but this hasn't been done - thus these proposals are flawed at this time

Address both problems together and today's announcements make sense, but there's been no indication of this - probably because renting in this country is seen as a poor man's choice, or a stop-gap on the road to ownership you have to endure... and of course that many of FG's core vote (and members) are wealthy landlords themselves.

If you wait for all areas of policymaking to be co-ordinated before doing anything, nothing will get done - it'd be good to see things all done at once, but we'll have to take it piecemeal.

The timing doesn't make it any less important or useful a policy.

KomradeBishop

realweirdo wrote: »

Most purchasers of new or second hand homes are couples, either newly married, about to get married or long term married. They have a lot of other expenses. They buy a house, then they have to pay for a wedding, then kids come along. The expenses keep mounting up. When they were young with no big costs, getting the money together for a big deposit was no problem. But with all the extra costs, now they are struggling. And what happens if one loses their job? Its not an indicator at all. Situations change.

You're just inventing hypotheticals/anecdotes here, which favour your argument - individually irresponsible people isn't what matters here, what matters is having a good general/catch-all policy, that gives a decent indicator of ability to save and thus repay a mortgage, among all mortgageholders (even if there are exceptions).

_Kaiser_

KomradeBishop wrote: »

That's an extension of the supply problem...the proper target there, is on fixing the supply problem.

Which there are no plans to do - indeed current government policy is to increase house prices further

You can't fix the part of the housing problem today's measures are designed to (purchasing/mortgage sustainability) without fixing the other side (supply and rental)

That's why this is a mess.. truth be told, if we had an effectively regulated and controlled rental sector, with reasonable rents as a result of sufficient supply, size and quality, and a lease system that encouraged long-term (10-15 years+) tenancies, I'm sure a lot of people looking to buy now would happily take that option instead.

But because the private rental sector in Ireland is treated as a poor man's option, to be exploited by those who can afford to play landlords and tenants who equally treat it as a joke on the road to ownership, people are left with no other choice BUT to buy

THAT is the real problem.. the Irish NEED to own their Semi-D .. but that too isn't addressed by this measure - indeed it'll only make it worse as it widens the divide between the have's and have-not's

mug_holder

its a prudent move from a macro POV

it will most likely dent the economic recovery in the short term , it might increase house prices in the commuter belt as dublin will now be beyond the borrowing threshold of many first time buyers

it will raise rents in dublin further but in reality , rents in dublin are considerably below average for a european capital

matt-dublin

http://mobile.bloomberg.com/news/2013-09-05/seoul-no-singapore-as-korea-housing-bears-raise-rents.html

Learnings from Korea:

This caused significant rent inflationary
Property prices initially only dropped 4% over 6 months and stagnated. Now it's stalled and the government can't get it going again despite text incentives and LTV increases.

Average apartment in Seoul is $444,000 to buy apparently.

KomradeBishop

realweirdo wrote: »

Komrade, I will need to investigate the Korean bubble to see what sort of bubble it was. However, the reason for the Dublin "bubble" is demand outstripping supply, massively. One approach is to increase supply. The other is to reduce demand. The CB have opted for the latter option.

The policy change here is a long-term policy change, it is not just aimed at the current bubble - it is aimed at all future bubbles.

Both should be done.

matt-dublin

KomradeBishop wrote: »

The policy change here is a long-term policy change, it is not just aimed at the current bubble - it is aimed at all future bubbles.

Both should be done.

Then it shouldn't be a knee jerk, it should be phased in.

KomradeBishop

matt-dublin wrote: »

I'm giving out because this won't benefit the market until investors are tied up. I'm 32 and have a deposit, currently selling an apartment and looking to rebuy and start a family.

20% is short sited especially when borrowing has been so low on the residential market. It's just going to prevent people being able to buy and could potentially increase homelessness.

If somebody is on the path to homelessness, they can't afford a mortgage...

The solution for all of the people who are struggling, is to fix all of the other areas of the economy, like the rental market and the housing supply problem, and the jobs/unemployment problem, and the general economic problems facing this country.

Not making this change that the CB is looking at, which is aimed at taming the current property bubble and preventing future ones, just because people are having a hard time in the current market, is short-sighted.

This is a long-term policy, that is needed (alongside many other similar policies), to stop property bubbles.

There are a lot of people suffering due to current economic conditions - that can't be helped - this has to change irrespective of that.

KomradeBishop

_Kaiser_ wrote: »

Which there are no plans to do - indeed current government policy is to increase house prices further

Then the only option left, is for the CB - which is (theoretically) independent from government - to put in place this restriction, among other restrictions which should be put in place.

The blame then, should be towards government for stoking a property bubble and/or protecting an imbalanced rental market, not the CB for containing it.

realweirdo

KomradeBishop wrote: »

The policy change here is a long-term policy change, it is not just aimed at the current bubble - it is aimed at all future bubbles.

Both should be done.

I have no problem tackling all future bubbles.

But buy to let investors have been a massive driver of all bubbles since the foundation of the state. And will always be. And they are largely untouched by all this. The LTV relation has I think been moved out to 30%, but for cash rich investors, this shouldn't be a problem. And their record of arrears is even worse than FTB.

Drive Buy to let investors out of the market and you will make a massive difference to solving bubbles and bringing down prices. But what I see is the CB/government driving out FTBs and leaving BTL's relatively alone.

dxhound2005

mug_holder wrote: »

its a prudent move from a macro POV

it will most likely dent the economic recovery in the short term , it might increase house prices in the commuter belt as dublin will now be beyond the borrowing threshold of many first time buyers

it will raise rents in dublin further but in reality , rents in dublin are considerably below average for a european capital

I think it is very obvious that the current surge in buyers, if it is happening is simply those who held back when prices were still going down. As soon as it became apparent that prices were definitely increasing a lot of people moved at the same time. Totally understandable as nobody wanted to buy a house which might go down and everybody wants to buy one before it increases further. All along these people had the money or could have borrowed the money in a falling market.

If the result is that Dublin people have to buy in the likes of Mullingar or Carlow they will do so just like they did before. A repeat of what happened earlier this century must be avoided. The percentage of the economy which is construction related must be kept at a sensible level. This will mean unemployment remaining at about the historical average of 10%. Getting it down to 4% would only be based on the same madness as went before and would make things worse for everyone in the longer term.

KomradeBishop

matt-dublin wrote: »

http://mobile.bloomberg.com/news/2013-09-05/seoul-no-singapore-as-korea-housing-bears-raise-rents.html

Learnings from Korea:

This caused significant rent inflationary
Property prices initially only dropped 4% over 6 months and stagnated. Now it's stalled and the government can't get it going again despite text incentives and LTV increases.

Average apartment in Seoul is $444,000 to buy apparently.

Why are you speaking of a drop and then stagnation in house prices, as if that is bad thing?

KomradeBishop

realweirdo wrote: »

I have no problem tackling all future bubbles.

But buy to let investors have been a massive driver of all bubbles since the foundation of the state. And will always be. And they are largely untouched by all this. The LTV relation has I think been moved out to 30%, but for cash rich investors, this shouldn't be a problem. And their record of arrears is even worse than FTB.

Drive Buy to let investors out of the market and you will make a massive difference to solving bubbles and bringing down prices. But what I see is the CB/government driving out FTBs and leaving BTL's relatively alone.

I don't know enough about the BTL situation there, to comment - that certainly seems to be a good target for changes as well.

It is not mutually exclusive though, both can be done - this change is still a good thing and desired.

realweirdo

dxhound2005 wrote: »

I think it is very obvious that the current surge in buyers, if it is happening is simply those who held back when prices were still going down. As soon as it became apparent that prices were definitely increasing a lot of people moved at the same time. Totally understandable as nobody wanted to buy a house which might go down and everybody wants to buy one before it increases further. All along these people had the money or could have borrowed the money in a falling market.

If the result is that Dublin people have to buy in the likes of Mullingar or Carlow they will do so just like they did before. A repeat of what happened earlier this century must be avoided. The percentage of the economy which is construction related must be kept at a sensible level. This will mean unemployment remaining at about the historical average of 10%. Getting it down to 4% would only be based on the same madness as went before and would make things worse for everyone in the longer term.

No-one wants to see a return to the 2004-2007 bubble when every tom, dick and harry was into construction. Like you say a reasonable construction industry like everywhere in Europe is required. Most people agree around 50,000 houses built a year is about right for this country. But we are now building less than 10,000 a year. By all means keep out the cowboys, but do encourage dependable builders.

matt-dublin

KomradeBishop wrote: »

Why are you speaking of a drop and then stagnation in house prices, as if that is bad thing?

Drop of 4% and then he market crashed because no one could buy.

When the government tried to stimulate the market they couldn't and now they're currently stuck with a dead property market.

Where we will end up.
No houses available and no available lending.

Who wins?? local and more importantly foreign investors who can pony up deposits from foreign loans. Effectively giving them 100% mortgages.

KomradeBishop

dxhound2005 wrote: »

The percentage of the economy which is construction related must be kept at a sensible level. This will mean unemployment remaining at about the historical average of 10%. Getting it down to 4% would only be based on the same madness as went before and would make things worse for everyone in the longer term.

That has nothing to do with unemployment - employment can go into areas other than construction, so going down to 4% doesn't mean a construction boom.

realweirdo

matt-dublin wrote: »

Drop of 4% and then he market crashed because no one could buy.

When the government tried to stimulate the market they couldn't and now they're currently stuck with a dead property market.

Where we will end up.
No houses available and no available lending.

Who wins?? local and more importantly foreign investors who can pony up deposits from foreign loans. Effectively giving them 100% mortgages.

I think a dead property market will also become the norm in Ireland.

I also think a lot of mortgage brokers will be put out of business, solicitors working in coveyencing, engineers who assess buildings, and other companies dependent on house sales will suffer. There is no doubt there will be significant job losses.

mug_holder

dxhound2005 wrote: »

I think it is very obvious that the current surge in buyers, if it is happening is simply those who held back when prices were still going down. As soon as it became apparent that prices were definitely increasing a lot of people moved at the same time. Totally understandable as nobody wanted to buy a house which might go down and everybody wants to buy one before it increases further. All along these people had the money or could have borrowed the money in a falling market.

If the result is that Dublin people have to buy in the likes of Mullingar or Carlow they will do so just like they did before. A repeat of what happened earlier this century must be avoided. The percentage of the economy which is construction related must be kept at a sensible level. This will mean unemployment remaining at about the historical average of 10%. Getting it down to 4% would only be based on the same madness as went before and would make things worse for everyone in the longer term.

an auctioneer once said to me

" no one wants to buy property when its cheap "

paralysis set in four years ago even though property was at a fifteen year low in some parts of dublin , psychology is huge when it comes to any market from property to stocks , from a macro POV ,todays move prempts a nasty conclusion to what is a very real bubble in dublin

mug_holder

dxhound2005 wrote: »

I think it is very obvious that the current surge in buyers, if it is happening is simply those who held back when prices were still going down. As soon as it became apparent that prices were definitely increasing a lot of people moved at the same time. Totally understandable as nobody wanted to buy a house which might go down and everybody wants to buy one before it increases further. All along these people had the money or could have borrowed the money in a falling market.

If the result is that Dublin people have to buy in the likes of Mullingar or Carlow they will do so just like they did before. A repeat of what happened earlier this century must be avoided. The percentage of the economy which is construction related must be kept at a sensible level. This will mean unemployment remaining at about the historical average of 10%. Getting it down to 4% would only be based on the same madness as went before and would make things worse for everyone in the longer term.

an auctioneer once said to me

" no one wants to buy property when its cheap "

paralysis set in four years ago even though property was at a fifteen year low in some parts of dublin , psychology is huge when it comes to any market from property to stocks , from a macro POV ,todays move was sensible as it prempts a nasty conclusion to what is a very real bubble in dublin

mug_holder

realweirdo wrote: »

I think a dead property market will also become the norm in Ireland.

I also think a lot of mortgage brokers will be put out of business, solicitors working in coveyencing, engineers who assess buildings, and other companies dependent on house sales will suffer. There is no doubt there will be significant job losses.

its a psychological blow at a time when growth is more imperative than fiscal prudence

ireland has enormous debt , that is a reality so growth is our only way out , today will dent growth

realweirdo

mug_holder wrote: »

an auctioneer once said to me

" no one wants to buy property when its cheap "

paralysis set in four years ago even though property was at a fifteen year low in some parts of dublin , psychology is huge when it comes to any market from property to stocks , from a macro POV ,todays move prempts a nasty conclusion to what is a very real bubble in dublin

They are not really addressing the underlying issues though. They are pushing up the "cost" to borrowers. But its not solving a very real housing crisis in Dublin. What they did today was a very crude attempt at solving a problem and there's little guarantee it will work.

matt-dublin

realweirdo wrote: »

They are not really addressing the underlying issues though. They are pushing up the "cost" to borrowers. But its not solving a very real housing crisis in Dublin. What they did today was a very crude attempt at solving a problem and there's little guarantee it will work.

And suggested evidence that it won't!!!!

dxhound2005

KomradeBishop wrote: »

That has nothing to do with unemployment - employment can go into areas other than construction, so going down to 4% doesn't mean a construction boom.

OK, I won't derail the thread any further after this.

Unemployment Rate in Ireland decreased to 11.10 percent in September of 2014 from 11.20 percent in August of 2014. Unemployment Rate in Ireland averaged 10.98 Percent from 1983 until 2014, reaching an all time high of 17.30 Percent in December of 1985 and a record low of 3.70 Percent in January of 2001.

That 4% ish rate coincided with most of the height of the construction boom. Unless some other sector of the economy can bring it down without resorting to artificial economics then the most likely outcome is that is will continue at something like the historical average.

KomradeBishop

matt-dublin wrote: »

Drop of 4% and then he market crashed because no one could buy.

When the government tried to stimulate the market they couldn't and now they're currently stuck with a dead property market.

Where we will end up.
No houses available and no available lending.

Who wins?? local and more importantly foreign investors who can pony up deposits from foreign loans. Effectively giving them 100% mortgages.

Here's an IMF report on Korea, with a different conclusion of that:

expected house price increases in the future become lower after policy intervention and this is more prevalent among older households while plans to purchase of a home are more likely to be postponed by those who already own a property, i.e., potential speculators, but not by those who do not own a property, i.e., potential first-time home buyers. These findings suggest that tighter limits on loan eligibility criteria, especially on LTV, curb expectations and speculative incentives.

Policy implications of our analysis are encouraging. In housing markets, expectations are key as they often facilitate the settling in of bubble dynamics. If, as suggested by the evidence presented here, limits on LTV curb expectations and discourage potential speculators, they can be effective tools to tame real estate booms and contain the associated risks.

https://www.imf.org/external/pubs/ft/wp/2011/wp11297.pdf

This seems to give the opposite result of what people claim: Reduction in plans to purchase homes by speculators, and no change in first time buyers plans.

KomradeBishop

dxhound2005 wrote: »

OK, I won't derail the thread any further after this.

Unemployment Rate in Ireland decreased to 11.10 percent in September of 2014 from 11.20 percent in August of 2014. Unemployment Rate in Ireland averaged 10.98 Percent from 1983 until 2014, reaching an all time high of 17.30 Percent in December of 1985 and a record low of 3.70 Percent in January of 2001.

That 4% ish rate coincided with most of the height of the construction boom. Unless some other sector of the economy can bring it down without resorting to artificial economics then the most likely outcome is that is will continue at something like the historical average.

Employment levels don't settle towards historical averages - there is zero economic logic or evidence to indicate that.

matt-dublin

KomradeBishop wrote: »

Here's an IMF report on Korea, with a different conclusion of that:

https://www.imf.org/external/pubs/ft/wp/2011/wp11297.pdf

This seems to give the opposite result of what people claim: Reduction in plans to purchase homes by speculators, and no change in first time buyers.

That report is from 2011, doesn't reflect what the article I posted covers 2012 and after.

matt-dublin

bloomberg wrote:

President Park, who took office in February, has identified reversing the sluggishness in the residential market as key to bolstering economic growth and to fulfill her campaign pledge to usher in a “people’s happiness era.”

The government will cut home-purchase taxes and increase the supply of cheaper mortgages to spur homebuying, as well as adding to rental housing stock and giving tax breaks on rental expenses for low-income households.

So basically in September last year that had to revert some of the changes they made to support a bolstering property market.

matt-dublin

Also if Edna's crew thought this was the right thing to do they would bring back a higher stamp duty

matt-dublin

Not only that I'm pretty sure there was a 10% stamp duty during the boom. Apparently it didn't make a difference even before the 100% mortgages.

KomradeBishop

matt-dublin wrote: »

That report is from 2011, doesn't reflect what the article I posted covers 2012 and after.

Here is one from 2013:

Evidence for the effectiveness of macroprudential policies may have positive implications for systemic risk. Indeed, LTV and DTI regulations seem to have had significant effects in mitigating the credit risk of mortgage loans. For instance, delinquency rate and value-at-risk tend to fall after LTV or DTI regulations are tightened, and vice versa (Figure 19). DTI regulations, introduced in late 2005, also appear to have affected the composition of mortgage loans. The share of installment loans in total mortgage loans was less than 40 percent at end-2005. It began to rise from 2006 and stood at 65 percent by 2012 (Figure 20). The rising share of installment loans indicates the reduced rollover risks faced by borrowers and thus less default
risk on mortgage lending.
...
Preliminary evidence for Korea seems to offer strong support for the usefulness and effectiveness of macroprudential policies as a tool to achieve and ensure macrofinancial stability.
LTV and DTI regulations have helped stabilize housing markets and keep credit expansion under proper control.

https://www.imf.org/external/np/seminars/eng/2013/macro2/pdf/ck2.pdf

matt-dublin

KomradeBishop wrote: »

Here is one from 2013:

https://www.imf.org/external/np/seminars/eng/2013/macro2/pdf/ck2.pdf

Yet they still changed the LTV a and tax incentives to support property sales...

Strange that one. It's not often the IMF get things wrong...

KomradeBishop

That's because the deposit/LTV rate is something that should be changed in a counter-cyclical way - higher deposits when there's a bubble, lower deposits when there's stagnation.

matt-dublin

globalpropertyguide wrote:

The peak of South Korea’s house price boom was reached in 2006, when Seoul prices rose almost 20%. Then the government applied the brakes, imposing controls on housing loans, and hiking capital gains taxes on “speculative areasâ€. These cooling measures caused a slight slowdown in 2007, with 5.4% price rises in Seoul (1.75% in real terms) and 3.1% nationally (0.6% in real terms). In 2008, house prices rose 5% in Seoul (0.86% in real terms) and 3.1% nationally (-1.5% in real terms).

From April to October 2009 there were house price declines, triggered by the Lehman shock and government curbs. Property transactions fell 35.8% y-o-y to September 2010, in the midst of a cycle of overbuilding. The mini-slump caused the construction industry severe problems.

The government began reviving the housing market in 2009 by purchasing KRW 2 trillion (US$ 1.79 billion) worth of unsold newly built housing, and KRW 3 trillion (US$ 2.68 billion) of land from construction firms wishing to repay their debts.

This was followed by a more intensive expansion measures in August 2010, as the government partially eased real estate lending restrictions through the following measures:

Restrictions on total debt payment ratios in non-“speculative areas†were abolished;
Households with annual incomes of KRW 40 million (US$ 35,787) or lower can now avail loans worth up to KRW 200 million (US$ 178,937) for house purchases;
The grace period for extra tax on asset transfer income was extended; and
Housing registration tax exemptions were also extended.

In early-2011, the government implemented more measures to help the decimated construction industry, including tax incentives for real estate investment trusts that buy unsold housing,. It also halved home purchase taxes to 1% to 2%, from between 2% to 4%. The government also announced the establishment of a “bad bank†– the Project Financing Stabilization Bank (PFSB) – to take on as much as KRW 1.2 trillion (US$ 1.1 billion) of non-performing loans, beginning June 2011.

In December 2011, the government revealed another new set of policy measures including:

Abolition of punitive capital gains taxes on owners of more than one property
Securitization of up to KRW 2 trillion (US$ 1.79 billion) worth of debt owed by construction companies
Rules preventing the quick sale of properties in Seoul’s real estate hotspots lifted
Expansion of eligibility for cheap loans offered to first-time buying married couples and low income-earners, and the reduction of lending rates by half a percentage point to 4.2%.
Reduction of the levy to 6% - 35% on profits obtained from home sales made by multiple homeowners from 50% - 60% rate introduced in 2005.

Seems to paint a different story

matt-dublin

KomradeBishop wrote: »

That's because the deposit/LTV rate is something that should be changed in a counter-cyclical way - higher deposits when there's a bubble, lower deposits when there's stagnation.

But the bubble at the moment is being caused by lending. It's being caused by supply and demand as well as investment opportunity.

realweirdo

But the Central Bank don't even seem to understand this bubble. Some economists are arguing that it isn't even a bubble at all. I see it as just a natural function of the market, ie short supply, large demand. You can cut back the demand, but the supply will remain an issue.

If you leave the market to itself, it usually rights itself in the end. What you don't want is too much credit or too little credit. And the EU was responsible for both these cases.

KomradeBishop

matt-dublin wrote: »

Seems to paint a different story

Not really - they successfully popped a property bubble, and then got caught in the same economic crisis as the rest of the world.

matt-dublin

KomradeBishop wrote: »

Not really - they successfully popped a property bubble, and then got caught in the same economic crisis as the rest of the world.

Theirs was a different animal with LTV of 110-115% and LTI of 6-7

KomradeBishop

matt-dublin wrote: »

But the bubble at the moment is being caused by lending. It's being caused by supply and demand as well as investment opportunity.

Unless investors made up 100% of the buyers, then lending is assisting in causing the bubble.

Both lending and the supply problems need to be dealt with. If one (supply) is not being dealt with, then the other absolutely must be dealt with, to stop the bubble.

matt-dublin

KomradeBishop wrote: »

Unless investors made up 100% of the buyers, then lending is assisting in causing the bubble.

Both lending and the supply problems need to be dealt with. If one (supply) is not being dealt with, then the other absolutely must be dealt with, to stop the bubble.

The central bank today admitted that they felt lending was not contributing to inflated property prices!!!

KomradeBishop

matt-dublin wrote: »

Theirs was a different animal with LTV of 110-115% and LTI of 6-7

That's special pleading - they've shown that the general principle with LTV ratio works.

Anyway - this debate is going nowhere, and the same arguments that have been dealt with earlier are coming up again (and I want to go to bed...), so I'm bowing out.

matt-dublin

KomradeBishop wrote: »

That's special pleading - they've shown that the general principle with LTV ratio works.

Anyway - this debate is going nowhere, and the same arguments that have been dealt with earlier are coming up again (and I want to go to bed...), so I'm bowing out.

No doubt in a 3/4 bed semi that you already have a mortgage on.....

mug_holder

matt-dublin wrote: »

But the bubble at the moment is being caused by lending. It's being caused by supply and demand as well as investment opportunity.

savings are paying less than 2% , bonds around the same , investors are finding yield very hard to come by

this move will benefit cash buyer investors the most as it will insulate them from competition and further drive up rents

Electric Sheep

Trigger Happy wrote: »

Remember, you need to save 20℅ plus stamp duty plus any moving and renovation and furniture costs. That is a big ask.

I reckoned it would be 10% and limited to four times joint salary....that would be reasonable IMO.

You do realize that is what people did before the bubble - save for years for the deposit. Get engaged, then spend the next 4 years or so living with their parents until they could afford to buy a house and get married. It was what everyone did in the 80s unless you were in the unusual position of having parents who could give you some of the deposit. The expectation was not there of being entitled to walk into a three bedroom house in Terenure at the drop of a hat.

Electric Sheep

small investor wrote: »

20% deposit is a fortune, average grad salary after 3 yrs maybe 30K ? with couple 60k by 3.5 = 210k where in dublin wud u find house for 210? and ud have to have deposit of 42k I think it should be 10% deposit and 5 times salary. So couple with 60k salary can buy house for 300k. Am I wrong, or will just really rich folks buy houses from now on?

You are wrong. People will relearn how to save and how to live within their means.

Electric Sheep

realweirdo wrote: »

Most purchasers of new or second hand homes are couples, either newly married, about to get married or long term married. They have a lot of other expenses. They buy a house, then they have to pay for a wedding, then kids come along. The expenses keep mounting up. When they were young with no big costs, getting the money together for a big deposit was no problem. But with all the extra costs, now they are struggling. And what happens if one loses their job? Its not an indicator at all. Situations change.

They don't have to pay for a wedding. They choose to spend money on a wedding to keep up with the Jones'.

realweirdo

Electric Sheep wrote: »

They don't have to pay for a wedding. They choose to spend money on a wedding to keep up with the Jones'.

Moore Mcdowell..is it yourself??

Gael23

This really is a case of bankers protecting their own interests.
The impact of such a policy on the ground is that house prices will drop another 50% and rents will soar probably by as much.

the groutch

This legislation goes nowhere near far enough.
It still allows for 20% of lending to be outside the limits, allowing them to still give unrealistic and unsustainable loans to all their buddies.
Cronyism at it's finest.

Balmed Out

ryanf1 wrote: »

This really is a case of bankers protecting their own interests.
The impact of such a policy on the ground is that house prices will drop another 50% and rents will soar probably by as much.

More a case of the central bank protecting the taxpayers from bankers.

Lord Trollington

KomradeBishop wrote: »

That's because the deposit/LTV rate is something that should be changed in a counter-cyclical way - higher deposits when there's a bubble, lower deposits when there's stagnation.

This talk of a bubble is a fallacy.

There is a massive massive supply shortage. Majority of sales at the moment are cash buyers.

These aren't ordinary joes buying a family home.