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Property DOOM: Bank of England opens the door to bigger mortgages

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    Property DOOM: Bank of England opens the door to bigger mortgages

    "Threadneedle Street to launch consultation on reforming lending rules next year that may let thousands of borrowers to take out bigger loans

    The Bank of England is to consider relaxing mortgage affordability tests in a move that will stoke fears over a further surge in house prices.

    Threadneedle Street will launch a consultation on reforming lending rules early next year, potentially allowing thousands of borrowers to take out bigger loans.

    Tighter checks were introduced in 2014 to stop another property crash crippling the UK economy in the wake of the financial crisis.

    The rules limit the number of mortgages that banks can lend at high loan-to-income ratios and introduce affordability checks, stopping households building up too much debt.

    However, the Bank revealed it is now considering withdrawing a stress test that judges whether borrowers can afford their mortgage if their interest rate increases by 3 percentage points above their standard variable rate.

    Officials said that the affordability test provides little extra protection when interest rates are very low, and removing it would make the rules “simpler and more predictable” while reducing the impact on a “small proportion of borrowers”.

    The Bank estimates that one in 20 borrowers took out smaller mortgages than they would have been able to because of the affordability test, amounting to about 30,000 households a year."

    https://www.telegraph.co.uk/business...ger-mortgages/

    And one Ring to rule them all - residential property.

    It's so pathetic to watch this, it's unreal. When will this Japanesation end by making children inherit parents' mortgages?


    I guess shaunbhoy can't wait for this to finally happen


    #2
    A lot of wheeler dealer tradesmen in my part of Essex have done very well on the back of self certified mortgages taken out in the 90s and early 00s

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      #3
      My very first mortgage was a self-cert with a dodgy endowment policy.

      Nice to see that BoE are helping HMG/T to prop up the housing market.

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