They were the norm 30 years ago. It will make a huge difference. I was not a FTB, but first time in the UK and the challenge was the massive downpayment, the mortgage even allowing for interest rate rises was not a concern.
The Americans have a saying, “we don’t think you can afford a $1200 mortgage payment, so you’ll just have to keep paying $1600 in rent”
Nope.
You’ll need a perfect credit score. 3+ credit lines, etc. Evidence of savings activity. You’ll be limited by both general affordability (4.5 times salary, but calc factors age, kids, debts, income, bonus etc) and the mortgage payment needs to be less than your rent.
So if you live in Norwich and pay £900 a month that’s the max on your mortgage payment. That gets you about £130k, maybe £150k over 40 years (extra £30k interest thanks).
Doesn’t get your much house. Imagine how those numbers work in London! £340k limit from £2k rent and that’s over 40 years.
It’s good, Skipton are a great lender (they own Connell’s and Countrywide though…), But it’s not the solution. It’ll help some, but I bet I only approve 1 in 10.
Watch house prices go up another 50% if this becomes accepted again.
It’s all well and good saying you can afford a mortgage if you could afford the same rent, but god help you if there’s a market downturn and you end up in negative equity. With a 100% mortgage you have zero cushion.
Today, but not tomorrow
Just more pro-inflation policy to benefit the very short term
It will push up prices. Your deposit will be easy to get but the mortgage payments will be unaffordable.
Can I just not have the right to buy some discount land and site my own shack there? All I want is somewhere to eat, sleep and shit and doesn’t ask me for three limbs and a kidney.
I kind of doubt that someone unable to save will be able to afford the monthly with interest being where it is. At least not if they want a house they would actually want to live in.
8 comments
They were the norm 30 years ago. It will make a huge difference. I was not a FTB, but first time in the UK and the challenge was the massive downpayment, the mortgage even allowing for interest rate rises was not a concern.
The Americans have a saying, “we don’t think you can afford a $1200 mortgage payment, so you’ll just have to keep paying $1600 in rent”
Nope.
You’ll need a perfect credit score. 3+ credit lines, etc. Evidence of savings activity. You’ll be limited by both general affordability (4.5 times salary, but calc factors age, kids, debts, income, bonus etc) and the mortgage payment needs to be less than your rent.
So if you live in Norwich and pay £900 a month that’s the max on your mortgage payment. That gets you about £130k, maybe £150k over 40 years (extra £30k interest thanks).
Doesn’t get your much house. Imagine how those numbers work in London! £340k limit from £2k rent and that’s over 40 years.
It’s good, Skipton are a great lender (they own Connell’s and Countrywide though…), But it’s not the solution. It’ll help some, but I bet I only approve 1 in 10.
Watch house prices go up another 50% if this becomes accepted again.
It’s all well and good saying you can afford a mortgage if you could afford the same rent, but god help you if there’s a market downturn and you end up in negative equity. With a 100% mortgage you have zero cushion.
Today, but not tomorrow
Just more pro-inflation policy to benefit the very short term
It will push up prices. Your deposit will be easy to get but the mortgage payments will be unaffordable.
Can I just not have the right to buy some discount land and site my own shack there? All I want is somewhere to eat, sleep and shit and doesn’t ask me for three limbs and a kidney.
I kind of doubt that someone unable to save will be able to afford the monthly with interest being where it is. At least not if they want a house they would actually want to live in.