Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
IBM - Investing in AI Machine Intelligence Stocks - 25th May 19
Seasonal Dysfunction: Why Generations of Gold and Silver Investors Are Having Such Difficulty - 25th May 19
Employment - The Good and the Bad of Job Automation - 25th May 19
Gold Mining Mid-Tier Stocks Fundamentals - 25th May 19
Buy This Pick-and-Shovel 5G Stock Before It Takes Off - 25th May 19
China Hang Seng Stocks Index Collapses and Commodities - 24th May 19
Costco Corp. (COST): Finding Opportunity in Five Minutes or Less - 24th May 19
How Free Bets Have Impacted the Online Casino Industry - 24th May 19
This Ultimate Formula Will Help You Avoid Dividend Cutting Stocks - 24th May 19
Benefits of a Lottery Online Account - 24th May 19
Technical Analyst: Gold Price Weakness Should Be Short Term - 24th May 19
Silver Price Looking Weaker than Gold - 24th May 19
Nigel Farage's Brexit Party EU Elections Seats Results Forecast - 24th May 19
Powerful Signal from Gold GDX - 24th May 19
Eye Opening Currency Charts – Why Precious Metals Are Falling - 23rd May 19
Netflix Has 175 Days Left to Pull Off a Miracle… or It’s All Over - 23rd May 19
Capitalism Works, Ravenous Capitalism Doesn’t - 23rd May 19
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

The UK Housing Boom continues as Abbey relaxes lending rules to X5 to further inflate the housing bubble

Housing-Market / Strategic News Nov 01, 2006 - 09:33 AM GMT

By: Sarah_Jones

Housing-Market

The Abbey is to offer home buyers mortgages of up to five times their salary to help them cope with the booming housing market. The traditional limit has been 3.5 times salaries which has gradually been relaxed over recent years by many of the prime mortgage lenders and in some cases will lend as much as 7.5 times income depending on an individual's circumstances.   

'With house prices rising and the market going that way, people are having to borrow more to be able to afford a home,' an Abbey spokesman said last night.

'What we are doing is offering people the opportunity to borrow up to five times their salary. This is all dependent on affordability, salary, credit rating and deposit. We do not want to bankrupt anybody by doing this, but the high earners out there, with healthy deposits behind them who want to buy these houses that are just slightly out of reach will now be able to do that.'


Earlier this week, figures revealed that house prices across the UK had almost trebled in the last decade. Figures from Halifax showed that the average house price had risen 187 per cent from pounds 62,453 in the first quarter of 1996 to pounds 179,425 in 2006's third quarter - an average increase of 10.6 a year.

Though in reality five times salary is a good headline grabber, but five times will only available to people who pass the credit scoring with flying colours. Those that don't have an A1 credit score can expect to get somewhere around 3.6 times salary. Abbey also puts its applicants through an affordability check, assessing outgoings and income. Additionally the provision that borrowers must have a 25% deposit will effectively shut the door on many first-time buyers and thus aimed at second or third time buyers, i.e. those who have already made money on the property ladder.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments


01 Nov 06, 13:50
Re: The UK Housing Boom continues as Abbey relaxes lending rules to X5 to further inf

For every irresponsible lender there must be an irresponsible borrower



01 Nov 06, 13:54
Re: The UK Housing Boom continues as Abbey relaxes lending rules to X5 to further inf
cannot understand how anyone would be stupid enough to take this out! We currently overpay greatly on our mortgage (well we are saving 115% of our current mortgage each month to pay off a lump sum when the mortgage stops being fixed but it amounts to the same thing i suppose) to the extent that our payments are equal to what they would be had we taken out a 5x joint salary mortgage. We have no kids, pay no council tax, have no car to run, no real luxuries apart from one ok holiday a year and do sometimes struggle to save the amount we do but we have a choice and dont need to do this but we should only have to for 4 years luckily, and will obviously save less if/when we have kids or other responsibilities.

How people can knowingly let themselves in for the whole forseeable future with no choice and no way out, when I cannot see any way (and more to the point if they have any sense surely they agree) they could afford the repayments really are crazy!


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules