Halifax to restrict income multiple to x 4 on mortgages over £500,000

[Martin@AS Financial]

Nat West have just followed suit as I have just received this:



From Friday 6 June, NatWest Intermediary Solutions will be introducing a four times loan-to-income cap and maximum term of 30 years for all mortgage loans of more than £500,000. This change of policy is being introduced primarily to address the inflationary pressures we are seeing in London and will be applied in addition to the standard affordability assessment.
NatWest Intermediary Solutions places a strong focus on affordability and already has measures in place to safeguard customers borrowing large amounts, for instance, reducing loan to values for larger loans.
This measure adds to those safeguards and is targeted particularly at customers interested in the upper end of the London market, where the bank has seen the most inflationary pressure.

[Freelancer Financials]

It's mainly the banks who were bailed out by the government, Lloyds (HBOS) group and now NatWest (RBS). The government injected £37b into them during the credit crisis.

In return for the £37b (tax payers) investment, the government has a say in how the banks are run. They're hoping the other banks will follow, it will be interesting to see if they do!

Frankly, I don't think it will have any effect at all. The upper end of the London market is influenced by oversees cash buyers from Russia, South East Asia, China and The Middle East. Anyone living in London knows this. It's also straight forward Economics, demand and supply, there isn't enough housing stock in London.