Oh dear™: British entrepreneurs locked out of home ownership after rules tightened

[SantaClaus]

I think we should re-introduce liar loans. For 125% of the alleged value of the property. After all, if the repayments cannot be made, the houses can be repossessed and sold at a vastly inflated profit.

We have them... they are called BTL mortgages, except the "landlord" moves into the property.

[BrilloPad]

I think we should re-introduce liar loans. For 125% of the alleged value of the property. After all, if the repayments cannot be made, the houses can be repossessed and sold at a vastly inflated profit.

[d000hg]

So don't aim to buy a house in the first three years of turning entrepreneur; stay where you are or rent. People starting a business that is going to succeed tend to be prepared to sacrifice a lot to MAKE it succeed anyway.

[AtW]

So take out a 6% loan now, then remortgage a year or two later.

Honestly, some people are so ******* thick!

It would not be afffordable from banks point of view

[RetSet]

So take out a 6% loan now, then remortgage a year or two later.

Honestly, some people are so ******* thick!

[AtW]

Sounds like a very viable, resilient business, I almost feel like lending Josh the money myself

They are not asking banks to lend to business - everybody knows it's impossible (when you need money), if real estate is so risk free why should these people pay higher rates than their employees??? Surely employees should be asked to show 3 years of accounts in business they work for to be sure they don't lose jobs tomorrow?

[AtW]

Sounds like a very viable, resilient business, I almost feel like lending Josh the money myself

They sell pre-approved by admin sockies for just £19.99

[MrMarkyMark]

Josh Turner, founder of Stand4 Socks, which helps charitable causes every time someone buys its colourful socks, was unable to secure a mortgage to buy property in Manchester. He was forced to buy with his father.

Source: British entrepreneurs locked out of home ownership after rules tightened

Sounds like a very viable, resilient business, I almost feel like lending Josh the money myself

[AtW]

Alastair Machin, from Stoke on Trent, who owns Chaffinch Document, which does secure shredding for regulated organisations, and Chaffinch Student, which helps overseas students move to the UK, has been seeking a mortgage for six months.

[AtW]

Turnover doesn't equal profit!

Indeed.

Not all British entrepreneurs locked out either ...

[SueEllen]

Turnover doesn't equal profit!

[AtW]

"Britain’s entrepreneurs are being locked out of home ownership because high street banks deem them too risky for mortgages under rules introduced in the wake of the financial crisis.

Business owners, especially those who have started a company in the past three years, find it almost impossible to convince high street lenders to give them a mortgage, because of rules introduced to reduce the risk on banks’ balance sheets.

As a result, many are abandoning dreams of home ownership, or are forced to accept deals with sky-high interest rates, with some turning to family to underwrite the loans.

Alastair Machin, from Stoke on Trent, who owns Chaffinch Document, which does secure shredding for regulated organisations, and Chaffinch Student, which helps overseas students move to the UK, has been seeking a mortgage for six months.

“The banks want three years’ accounts, but because we only file documents with Companies House long after the financial year ends, even the most recent accounts are long out of date,” he says.

“The banks are not adept at looking at accounts and are unwilling to forecast.”

His businesses turn over £250,000 a year, and Mr Machin, who is 28, had saved a 15pc deposit but was turned down by mainstream banks or offered crippling terms – more than 6pc – by secondary lenders.

His fiancée, meanwhile, was only asked to produce three months’ pay slips to qualify for a mortgage.

“Two years ago she was made redundant when Phones4U went bust (AtW's comment: ), so clearly it’s not always fair to assess someone solely on the risk of being self-employed,” Mr Machin says.

“I’m investing in my business, creating jobs, and adding to the economy, but I’m effectively being penalised for that (AtW's comment: just wait until you pay new dividend tax, then you'd feel totally shafted by an elephant...). We owe no debt to any third party, we’re profitable but the banks are only looking for people who tick the right boxes. It’s been frustrating and disheartening.”

Josh Turner, founder of Stand4 Socks, which helps charitable causes every time someone buys its colourful socks, was unable to secure a mortgage to buy property in Manchester. He was forced to buy with his father.

Source: British entrepreneurs locked out of home ownership after rules tightened