| Topic: | Re:Re:Re:Re:Warning from the Bank of England | |
| Posted by: | Joe Conneely | |
| Date/Time: | 19/07/15 16:02:00 |
| Some personal observations given like other posters who mentioned I also lived though the mortgage rates of the '80s: 1. In those inflation driven days minimum house deposits of 10% having to be held in cash with the relevant financial institution who was going to give you a mortgage before you could even start a mortgage application was the norm. The percentages went higher especially for high values and single buyers in certain cases. 2. Most recent house purchases over £1 million have little or very low debt percentage mortgages based on articles seen in recent months in the FT especially. The potential pain on pending rate rises is at the lower levels of UK mortgage lender. 3. Interest rates despite the BoE Committee operations, are a crude tool and have always been a political football. The planned Tory strategy on releasing housing trust stock to buy by tenants as was seen with council housing under Thatcher is indicative of more meddling in a sector that needs a much more major strategic rethink. 4. Buy to let has been a rigged market I fear due to tax benefits distorting the commercial risks. Buyers have operated at thin margins of profit helped by pooled low interest offset on all property purchased and a notional wear and tear allowance of 10% of gross rents even if a penny was not spent in any year on repairs. The recent changes proposed are long overdue and probably do not go far enough given the poor rent protection in the UK versus many European countries especially Germany, where most people rent not buy. |