99% Mortgages Are A Terrible Idea.
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- Опубліковано 27 січ 2024
- News is circulating that the UK government is planning to introduce 1% deposit mortgages in an attempt to help first-time buyers, but is this a good idea?
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So basically the U.K. will try anything to fix a supply shortage except increasing the supply.
It's chicken and egg. It took me until I was 42 (2022) to buy a home with a 10% deposit (in the North of England). Neither myself or my partner have ever had financial help from our families. We understand the struggle to get on the ladder, but voting to increase supply with 90% LTV when we have less prime earning years to overpay the mortgage would be madness. Couple this with the fact we never had a pension match system in place in our 20s and most of our 30s, our home is essentially our only retirement fund. At least people in their 20s still have time on their side. The government needs to step in to look after both of these demographics.
It doesn't matter if you increase supply, as long as there is buy-to-let - there will be shortages for new home buyers
You can see how rents skyrocketed with interest rates increasing, because the whole of the rental market is dominated by buy-to-let mortgages.
I love how everyone looks at the problem like its a housing supply shortage, rather than demand increase while we net import a population the size of Birmingham year on year lmfao
Yeh. This is a plan to actually increase demand
Such a stupid idea, 99 percent loans, Subprime markets all over again.
Didn't they recently uncap bankers' bonuses? Much like they did the pre-2008 crash. De ja vu.
I think this is a continuation of propping up the housing market and the existing stock of homes, rather than doing anything that will alleviate the housing crisis. Aka building more houses.
If it doesn’t add supply and is pretending to be a solution to housing affordability, it deserves derision
We don't need more houses. We need MUCH less immigration, and also start REVERSING much of the immigration of the last ten years.
Not more houses, lss imigrunts.
600,000 net to me is a very good way of ramping up house prices, perhaps it is on purpose.
They're having a laugh. Do they think we're Stupid?😮😊. YES.
The solution should be not fuelling massive demand through forced interest rate (and soaring house prices), but increasing the supply of new homes.
Exactly.
A basic need is either made abundant or priced exploitatively. It’s all about supply.
I don't think this is as required as you think, a lot of homes sit unoccupied, so I think this wouldn't be required if they slowly removed the ability for people to earn money from their properties. If you want to own a property you must live in it. Too long has it gone on where people are stuck renting perpetually, if they can afford the rent they should be able to eventually own the house. It makes me sick that people can rent the same home for 30 years and never come to own it (which I'm pretty sure is more common than you think)
The trouble here though, is if there are enough properties to go around, house prices decrease. Scarcity keeps the prices up, and that's what the government do. They say they will build new homes, but always less than needed, to keep house prices up, and of course the bankers happy.
Or drop demand by reducing immigration? Why does nobody like to talk about that in this channel. Why should Britain build over its land and build high density apartments to bring in more people? We are going to live like the people in Asia in very high densities which will drop our living standards.
We have enough homes, more empty homes than homeless, so what drugs are you on...
Have we already forgotten the housing crash of 2007/8? 100% mortgages and some were interest only 😭 It didn’t end well.
Not to forget the Northern Rock "Together" 125% mortgages...
Anyone who bought back in 2007/8 and survived will think they bought cheap compared to present prices, they also benefitted from a huge period of cheap interest rates. I'm not for crazy house prices BTW but the last financial crisis showed govts will choose to print their way out of their problems, all that inflation eventually feeds it's way into assets like houses, getting a mortgage is kinda like the common man's hedge against that inflation
This government is desperate to prop up the last game in town, property. It's 15 years overdue a correction.
A 1% deposit as a single person on a salary of £30500? LMAO, OK. Should be able to lend enough to buy a shed with a monthly payment of £805 for 25 years. 🤦♂️
This does absolutely fuck all for affordability. They can tinker with supply, or the structure of mortgages, or even wages as much as they want, but so long as homes are treated as investment vehicles first and things to live in second the situation will continue to get worse. Any such policy will at the very best act as a temporary alleviation.
Has anyone actually lived inside of London? The place fucking sucks. I've lived in Acton, Ealing, Dalston, Walthamstow, Angel, Stratford. There's crackheads everywhere. You can't walk out of any house in London without bumping into a fucking crackhead on the next corner. The houses are small, mouldy, and just pure shit. The roads are small and cramped, you can't take a single corner without almost crashing into an SUV coming across your side of the road from the opposite lane. There's random bus lanes and no entry areas absolutely EVERYWHERE scaring you from even driving without being fined in the first place, the road markings are non existent making it again, just shit for driving. The prices for everything are much higher than anywhere else in the country. It's such an absolute shithole, the only good thing London has going is the tube. I'm so glad I can remote work now so I can live in a tidy and quiet village outside Oxford.
When did you love in those areas? Some of them cleaned up, but most have always been a dump. You were there because the rent was less than the decent areas.
You still did it, London is full of short term renters, 18 to 35, living the life and getting thier careers started. Some make enough to buy a flat in a decent area and then sell it for a house within commuting distance
@@Jay-xr3sb Over the last 6 years, lol.
@@daedaluxe most are still a dump, but like I said, rent was cheaper there.
Plenty of decent places in London, but there's no need to pay the mark up, or pick the dumps. Enjoy 18-35 and use the underground to get anywhere.
It's never been for me when I've visited friends who've moved there for work.
They've all convinced themselves it's the centre of the universe, and that nothing happens outside London, whilst simultaneously paying all their wages in rent and never getting to do any of the things they feel only London affords them.
I've always preferred a visit myself.
@@bogstandardash3751 I loved my time there, you'll meet so many people at that time in life.
now I live in a decent house on the outskirts and pop in for work and socials every week.
It's not for everyone, esp if you don't like a big city. Compared to bham, Manchester etc, there is more going on with links in all directions.
If you want to help first time buyers, take action on house prices and low income. As you said, reducing the deposit level is explicitly targeting people who can't afford to save 5%. Getting on the ladder is all well and good, but if the average house price is still 10x the average salary, all you are doing is introducing more people to enormous amounts of debt compared with their income.
Build more (any?) council housing. Reduce the profitability of the rental market. Stop companies from paying poverty wages. You can't simultaneously help the lowest income population while protecting the ridiculous profit of multimillionaires. This government has been clear about which side it's on.
UK salaries are ridiculously low and employers profiting culture destroying backbone of economy and society
Indeed, gov has never been on peoples side ever.
@@rdtheskaldfalse. US subsidized the increase in availability of residential real estate a handful of times in the past.
Then it stopped and housing became unaffordable
@@SigFigNewton This is about UK, not US.
It’s impossible, if you raise wages you cause inflation. Building new homes isn’t simple, materials are and labour are expensive. I think k Greece did this, they built houses like crazy created loads of new jobs for a period of time and then bang it all stopped and became a mess.
The issue is the UK economy has been stagnant for too long. Foreign investments get away with too much here, the UK will always be a haven for the rich, great for investments and safe, especially London. If the rich want to park their money in the UK then they need to pay for it.
As long as people can afford asking prices, the housing market will continue to go up. This new idea will make house prices unaffordable for the next generation. It's a short term fix only.
Once the UK population stops being able to afford housing the government will bring in people who can.
Some would say that is already happening.
As with everything in this country, the younger you are, the harder life will be for you
Great vid, but the 99% mortgage is ludicrous and totally not what is needed. The govt always does this. Try and get people to borrow more rather than make housing more affordable. This is why we are on the mess we are. 🤬
Feels like legislation by lenders
The problem with any of these schemes is that they artificially prop up high prices. I've never understood why people are happy for their property prices to increase, as everything is relative, so their next house will cost them more. They also forget that over the course of their mortgage, they've made it impossible for their children to get on the ladder. It's silly.
Sounds like a trap. At this point, I'm not even interested in my own place - the UK is in such a state that it might actually be a better idea to emmigrate. The NHS is pretty much the only reason to stay.
But emigrate to where?
The NHS that has a 2-4 year waiting list? The NHS is barely in tact. Its crumbling by the day
You've clearly not used the NHS.
The NHS won’t even get an ambulance to you quickly if you have a heart attack. Many countries in Europe have better healthcare, including poorer ones.
Where would you go?
7:20 I LOOOOVED your final take, really sums up the whole point!
It’s frightening that this would even be considered, this will only push the house prices up yet again like it did when the government introduced help to buy and stamp duty holiday.
That's why they do it
When will these absolute melts realise it’s time to finally build houses again, and some of those homes need to be for social housing as well as for private sale…
“21% of homes in the UK were built before 1919, 38% before 1946, and only 7% after 2000“
When you have 5/6 house developers holding a monopoly on house building…. It isn’t in their interest to build lots of affordable homes for us peasants. Best to keep the housing stock in a shortage and charge us a fortune for the next 30/40 years of our lives 👌
The greed is crushing the economy.
When you spend 60% of your income on mere housing, you spend nearly zero percent at local small businesses.
Correct.
The only solution is a stagnation in property value in monetary terms. If the average house is worth 300k then its value needs to kept 300k whilst inflation inevitably makes 300k worth 150k over ten years.
Then the market starts to become fixed, and people who've bought a house to have a family to avoid crazy rents, don't lose their shirt in negative equity.
Its the only way i can see to move forward.
UK gov be like: Here's a bandaid for your axe wound.
And the bandaid/plaster (in the uk) will cost 40% of your take home salary
Controversial, but the government could try and limit BTLs and build more houses.
They're trying to fix a supply issue with another demand solution. All this does is force more people to get into more debt for longer.. but that's precisely what they want, as it's the rich that benefit from the ever increasing interest.
Low transaction numbers are causing the house builders to reduce their output. Increasing the demand of first time buyers will increase supply because the house builders will then build more. The government need to do something to them keep house building at a constant high output.
@@malcolmcoles8014 low transactions have nothing to do with builders output of housing . its all to do with the amount they are paid per house built , which isnt enough so they build flats to cover demand and then build 3-4 houses to say that they actually built houses .
even thats not the main root problem , the biggest in my eyes if the goverment giving property developers money to buy land that they then sit on for 5-10 years while it appriciates then go back to tender and ask for more money to then build houses on it .
overall its a pretty messed up system where only small portion mainly middle management actually get a slice of the pie or company holders
@malcolmcoles8014 the government should be pumping out council houses, see if builders sit on their hands then
I work for a house builder. We need to sell our stock to pay for building the next lot and to buy land. We've mothballed sites for up to 2 years due to this.
Love these videos mate, your perspective is appreciated!
Let's feed further this property bubble 😂
Keep on pumping!
There is no bubble, I think that’s what people misunderstand. It doesn’t always have to be a bubble and a crash, it can just be a rise and a correction. The language used for the housing market is alway so extreme.
The reason there is no bubble, is because there is a housing shortage and rents are high and will only continue to get higher. Until an interest only mortgage on a property is substantially higher than rent on the same property, then the market will stay fairly stable. A lot of people are talking about the cliff edge for homeowner mortgages with interest rates, but no one mentions how that same cliff edge is going to impact BTL mortgages and rent prices. And remember BTL mortgages are already 1-2% higher than residential. Landlords will either pass the additional cost plus 45% for tax, on to tenets or sell the property, lowering the number of rentals on the market. Either way rent is going up and until that comes down, house prices won’t “crash”.
@@theamateurguitarist6187too much focus on the word bubble.
If a basic need is not made abundant, it’ll be priced exploitatively.
We can reword the original comment “let’s maintain insufficient housing supply and therefore economy-strangling home prices”
I completely agree, just build more houses and flats! It’s not rocket science.
This issue so needs covering. Bravo!
Your analysis is superb.
Thanks.
Why UK isn’t offering fixed 30 years long mortgage? We get ripped off at every step by taxes and savings get destroyed by inflation plus high cost of living
I don't know how 30 year mortgages are going to work for the Yanks moving forwards.
If housing prices continue to fall they won't be looking so good to lock into a deal. You'll get negative equity like having finance on a car.
The elites are trying to destroy the economy by design. They want us to own nothing and rent everything from them. They want us all eating bugs while they keep the lobster. They want us locked down paying our taxes while they move freely and pay nothing. The want us all on a digital currency so they can track us, monitor us and punish us if we dare have the wrong opinion or speak out against the establishment. This is the end goal of the WEF and they are very patient, and we are very gullible.
They do look at perenna the thing is they come with higher interest rates
There are now some lifetime fixed mortgages offered by lenders (ie essentially 30 or 35 year mortgages). However they have varied in interest rate when I've been looking over the last 6 months - I'm not a mortgager broker, but it still seems (not knowing the future interest rates) that from a pure mathematics perspective sticking with the classic lower rate fixed period (say 5 year fixed) and then re-mortgaging at the end of the fixed period before the higher variable rate kicks in for another 5 year fixed etc makes more sense than sticking with the higher rate 30 year. Yes there are the fees associated, but versus thousands of pounds in extra interest a year that's still better.
They do, I had one. Remortgaged and brought down to 25yrs.
Catastrophically stupid idea
Yet you probably will still continue to vote Tory
If you can't get 5% together, you can't afford the house.
I get the sentiment, but it's not factually true. Rent is often more expensive than a mortgage would be.
i would go even further, if you can not get 15 to 20 percent together, you can not afford a house. if the markets shift, which they do every few years. 5 percent is going to offer no protection at all
@@MinkieWinkle Agree. To me even 5% feels sketchy. Personally I have always had at least 30% down, and I am 52 and bought multiple houses over the years. But it was easier 'in my day' - our first house cost £55K and my GF and I had saved 10K each, from a salary of £20K each. The house price / wage ratio is so bonkers those days now, I do feel for youngsters just starting out.
@@thegrinderman1090 but Rent is the maximum you pay, whereas a Mortgage is the minimum you will pay, if you own you need an extra 1-2% of the value of a property annually in repairs and maintenance. If you can't save a 10-20k deposit, what happens when the boiler breaks or there's a leak somewhere?
@@pvelectronics4291 This is the crux of it. House prices have exploded at a disproportionate rate to wages. I remember my mum saying when my dad bought a car in the late 90's that 16k was extortionate for a car as their first house was £18k.
My first house in 2012 was £218k. And that was a 3 bed semi. The family home which was bought for £190k in 1997...now 'worth' nearly half a million, if not more! It's pretty insane!
Shocking idea in a falling market. If you can fix for 5 years, dont overpay, can stay put for 5 years, it could help certain people. Years of huge interest payments to look forward too!!!
I've watched a few of your videos so far but wasnt sure about what a 1% deposit mortgage would mean for me, and you've been so informative, thank you
Reckless lending practices approved by government - what could go wrong. Two things are adding to the problem, you have way too much immigration in total (legal and illegal) and you basically will never be able to build enough houses to cope with that added pressure. The NetZero environmental regulations are also going to hit hard from 2030 which is going to make things even more difficult for home builders. So all this has been created by clueless ministers.
The elephant in the room finally addressed! You need to look at the factors driving the lack of supply. We have land...but most of it is greenfield countryside which people understandably don't want houses built on. So that creates a land premium.
Builders are facing material supply issues with costs increasing all the time for basics such as lumber etc. So that creates a cost premium.
We have a falling birthrate but an increasing overall population. That creates a supply vs demand premium.
All of the red tap and bureaucracy surrounding Net Zero etc. and changing regulations and demands creates another cost premium (things like mandatory inclusion of electric car charging provisions, air source heat pumps etc.)
There are multiple factors at play. But yet, NONE of them are being looked at or addressed. Simply, brushed under the carpet using a headline slogan like 99% mortgages.
This will just push house prices up even more and end up with 45 year mortgages
"Helping, and at the same time not helping, according to his therapist" - Eleanor Shellstrop, "The Good Place"
Here is a radical idea, end government regulations and BUILD MORE HOUSING!! It worked in the 1950s and it can work again
We don't have the same amount of land as in the 50s though! Unless you intend on building high-rise apartment buildings in rural villages?
Absolutely not. Any government hand out just adds to the house prices. By whatever devious corrupt way they do it. They know this! Lending should be restricted. Something like no property may have more the 70% of its value used to back debt, or any sort. Rates should be higher yet. Prices will fall when they can not get into excessive debts. Lower prices are the only thing that actually helps anyone.
People who are rich enough to buy a house should not be getting help, hand outs. Even if they ever worked!
What about the so-called proposed tax cut during the autumn statement? Need your opinion on it as well
your videos are so well scripted. v v good. Well done!
I strongly object to my taxes being used by government to prop up or further inflate house prices. They are using my money to price me out of the market.
Higher property prices => more tax collected
@@theamateurguitarist6187 I'm sure you do.
If the proposed solution does not increase housing supply, treat the proposition with contempt.
Maintain respectfulness toward the people being used by mortgage lenders to sell the idea, but treat with derision the supposed solution that fails to increase supply.
We have always had 0% deposit mortgages now it’s 1%, but 30 years ago you could even get 130% to have some funds to remodel the house and buy a car 😮 (Netherlands)
Why is the answer to a supply problem always props to demand.
The corrupt teaching the ignorant to “address” the problem
Treat it with the contempt it deserves. If a state adopts mindset of only taking seriously proposed solutions that increase supply, that state will solve the problem.
I think the issue is more theres so many rental properties its doubled from 20 years ago nearly 20% of all properties are, it drives up prices
I agree. Building more houses doesn’t solve the issue.
@@JM-yf3olNo economic line of thought supports that
Owner occupied homes and rented homes are close substitutes, and prices are correlated
Thanks 👍🏻
The were so many catches to the Skipton home loan.
With the quality of housing being built to house the mass immigration problem the debt will last longer than the house!!!
I agree feelers to win votes in the spring budget, let's see what is introduced then
Just coming out of a broken marriage I was lucky getting 100% mortgage 14 years ago as I had nothing,now I have moved got a better home and paid off lots
Where didnyou find the music you used ending the video? Sounds cool
Your content is brilliant.
Sounds like sub prime mortgages to me. How did that go?
Evening fella, love the content 👌 but can I make a suggestion? ..can you leave a few seconds at the intro before the video begins as sometimes we miss what's initially said ...cheers dude 😊
Liam Halligan’s book ‘Hone Truths’ outlines the issues with housing in Britain - its a great read to understanding the problem.
UK is not only London. They’re many areas , where is possible to buy fairly cheaply. If young person or couple from Leeds, who pay £850 rent , is able to get 99% mortgage for £140k , payment will be about the same. If someone doesn’t want to move out from area for another 5 years, it may be a god option for them.
Any update on adding Legal & General to your pension spreadsheet? Cheers👍🏻
The paradox of all this, is that these these government schemes push house prices higher up, which puts more first time buyers out of reach, which then causes more government schemes... And the cycle continues.
I remember back in the day when I got my 105% mortgage to help me cover the legal fees, but that was when there were plenty of properties at realistic prices. ALLOT of people are gonna get in a lot of trouble me thinks if this comes into play!
It is quite common to get 110% mortgages in Japan (the extra 10% is to cover fees and costs).
They’ve also got a lower birth rate. There’s a pattern emerging…
Always makes me wonder what these accessibility schemes do for underlying prices. Do more people end up having the opportunity to buy, or do prices just rise to meet the increased funding available? In a supply constrained market, this must surely be the outcome?
I think your right, it's like university costs have gone up a lot because of student finance I think
These programs perpetuate the need for themselves.
These programs maintain heightened loan sizes to the benefit of banks.
These programs deserve contempt for purporting to alleviate housing problems without increasing supply
The better idea I read this week was 25 years fixed mortgage. I think taking away the worry for buyers of market conditions is a win win
Long term fixes are the norm in the US, I don't see why we can't have that here. A middle ground interest rate to balance out the peaks and troughs long term, while providing certainty to buyers is surely a good idea.
@IAMMARTICUS1470 yeah the uncertainty that is happening now would not be as bad if people were on fixed long term mortgages
Through their inflationary effects, demand-side measures tend to price out 10 times as many people as they 'help' (read: help to get into a less sustainable level of debt). And, of course, they do this at the expense/risk of the taxpayer.
Good video. Yes affordability Issue: low income people can afford and make payment but lender won’t trust. Lenders also have to change their affordability criteria in line with that? Thanks
400k house. 4k deposit. 396k mortgage. No one has a high enough salary to afford the mortgage amount. They wouldn't give anyone the mortgage 😂
I'm Dutch, the normal for us is 0% downpayment, 100% mortgage, but we still have the same housing problem.
Also, the EU has a problem with this format, but it's BS because it's financial solid if you get too know all the rules.
Our minimal wage has going up in 2024 by law, now the houses are not 2% more expensive, but 4% because of it.
Governments can't be trusted too fix the problem.
Like all governmemt housing incentives its designed to help developers and increase house prices. It'll do nothing to help first time buyers by loading them up with more debt to buy a home which should be much cheaper if the market was allowed to adjust back to long term norms.
Instead of doing this to help young people how about giving us proper payrises. Im 32 this year and never had a payrise in my adult life. 2008 was the last nursing payrise. We need huge payrises and tax reductions (only for those on PAYE)
Cut immigration and bring back social housing at one end, incentivise building companies to make more houses by giving them tax breaks (corporation) at the other. This problem is controllable, you just need a government that are going to put young people first instead of the older demographic with real estate portfolios, which is absolutely not what we are seeing.
Terrible idea for the general public, but if you already own property i.e. conservative politians and their doners, this will make them money.
Just would make house prices more unaffordable.
The only way to fix this problem is to build more houses and cap the profits building companies are making.
We bought a new build 2 year ago and I’d happily lose money on it if it meant more houses where being built and younger people could get on the market.
It’s a human right to have your own home.
You ever going to do a video about your investments mate like what your portfolio looks like index funds etc be cool to see what you do with your money !
What’s the point in getting on the ladder if you’ll never own it?
millennial here, made some decent money from investing, and i'm leaving the UK before next tax year starts, pay your own pensions 👍
Aww, Spanky is so cute...most people won't even know who he is
If u need to borrow 99% of your purchase, maybe u shouldn't buy it, off topic but i feel Saving for a market slump is also a bad idea. There are different perspectives on recessions and depressions; we cannot always expect significant rewards; and taking risks is preferable to doing nothing. The bottom line is that by diversifying your portfolio and making sensible judgments, you will accomplish exceptional outcomes. In just 5 months, my portfolio's raw earnings increased by $608k.
I know nothing about trading /investment and l'm keen on getting started. What are some strategies to get started with?
As a beginner, it's essential for you to have a mentor to keep you accountable. I'm guided by a widely known Advisor.
Interesting, please how can i get more information? i don't want to remain out of ignorance, i really need to stack up this 2024.
LAURA GRACE ABELS’’
GOOGLE the name
I am on her site doing my due diligence. She seems proficient. I wrote her an email and scheduled a phone call. Thanks for sharing
If you can't save money you aren't in a position to buy. There's so many associated costs with home ownership and the initial process.
I think it's an excellent idea for those stuck paying high rents anyway. There monthly outgoings might be the same or even less.
It won’t help. Interest from a bank on 99% LTV will be insane, affordability calcs vs what you can rent means you will buy substantially less house than you can rent. My house has a market rent of £1200 pcm, so you’d need a household income of about £38k to rent it but my mortgage is £1650 pcm, 25% down on a house that was £330k, meaning you’d need a household income of £60k or thereabouts to afford it. It would be even worse borrowing a higher LTV. We should be focusing on lowering the price of the houses, not being so worried about a deposit. If that means that my house loses value that’s fine by me, I bought it for the security of not having a landlord who could throw me out, as long as I can make the payments until I’m 52 and it’s paid for I don’t care.
I wouldn't be so quick to accept a nominal loss of value of your house as a solution to the problem. Owning a house has other costs too, sometimes upredictible and very expensive. Owning vs renting has to make sense overall. Latest to date is the threat of mandatory energy class upgrade, whithout which you will not be able to rent or sell your property. Imagine a 1M house with 800k credit losing 20% value on top of which you need to inject additional 150k to improve wall insulation, install a heat pump, change the roof and windows. This is already 20 year rent thrown out the window. No one sane would enter such deal.
And in a year the house price inflation this stokes will mean no one will qualify under the income multiples and affordability.
Indeed, if it happens folk that get a 1-5% deposit mortgage need a plan to have their 10 percent together when they renew or they are going to be stuck!
Just when you think the UK housing market couldnt become more messed-up. Our government finds away...
Hey Damien, thanks so much for all your efforts. Do you offer private finance advice at all? Could really do with someone who knows what they’re doing to chat too!
Piss off bots
It's not like the tories to have a policy which mostly benefits themselves.
Urgh … this will just push prices up further and increase risk for borrowers
I promise I will watch you know me. But I'm going to go ahead and say yes.
Might as well do 99 year repayment plans too, stop building new homes and completely tank everything
In the Netherlands it is the norm to get 100% mortgages, until a decade ago it was possible to get 120% mortgages. At the moment you can still get 106% but that 6% then needs to be used for making your house more sustainable (bring down your energy usage etc and save money in the long run).
I like that t shirt damo, wheres it from?
(Mortgage Advisor) 100% mortgage with Skipton never had anyone approved based on credit
Interesting this! Thank you for sharing
The more they mess with the housing market, the worse it gets.
Increase supply, build.
Reduce demand, lower migration.
Short term price decrease is a good thing.
House prices are too expensive. That’s the beginning and end of it.
I took out a 125% mortgage with NR in 2002. I think the idea was that the rise in value would sort out the lender's over exposure.
The idea was to inflate house prices because someone worked out that lots of lending meant lots of growth and that looks great. They did this by removing housing costs from the inflation figure. This stopped people asking for pay rises that matched the increase in housing costs. They facilitated these loans by letting the banks borrow as much as the bank thought was ok. The trouble is that banks went mad lending and left themselves with insufficient liquidity to be viable if things went tits up. It did in 2008.
How look how that turned out for Northern Rock…
@@davideyres955 Every bad thing in the world seems to come from someone trying to look good and "make number go up" with complete tunnel vision to any other ramifications of their actions.
It would end up with Terraced houses once again being hyped up when in reality they should have been replaced decades ago.
Yes.
99x leverage. What could ever go wrong.. Even wallstreetbets maxed at 25x. And they got margin called on that.
It's simple supply and demand by giving out 99% mortgages you are just increasing the demand by making more and more people able to buy when there is no more supply so prices are just going to go up
Supply is too low, boys, time to increase demand!
It’s not legislation by idiots it’s legislation by and for lenders and land owners.
Fails the “does it increase supply” test, so don’t take it seriously as a potential solution
Well, in Poland for 2nd half of 2023 we had 2% with possibility of 0 downpayment (gov bank guarantee up to 20%) up to 500-600k PLN (125-150k USD). I bought my first apartment with this financing to save on interest and get some of my tax money tax back.
If the government wanted to actually help there would be so many ways to do that...
95% LTV loan but with fixed low interest, funded by long term bond sales for instance.
Government oversight, stability and low risk for all involved.
They literally don’t understand the basic economics of supply and demand
They do. They want engineered scarcity as overly-inflated house prices are the only thing keeping the UK economy afloat.
Let's hope so - house prices would go through the roof.
Then drop so badly you couldn’t give one away
The idea has been canned, the banks told Hunt it was a stupid idea 😂
This annoys me because the easiest part is the deposit the hard part is affording the monthly payment with all the other costs that come with home ownership
Wow! Really!? Who would ever have thought of that without your insight? Thanks!
@@bobjames6622 theres no need to be snarky mate
@@JimP-tc7gg it was just so obv tho that it didn't need typing 😂
Or get someone pregnant and get it free
Disagree, most people pay rent that is more than a mortgage will cost. Saving 25k for a house while paying rent is difficult.