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Bank of England
High LTV Mortgages
shiny new banking products
Save to Buy
It would be nice, just once, to come into the office and see some genuinely positive news in the housing market. Sadly, this week the press and all the feeds of PR have failed again to come up with any real stories that could have a positive impact.
Instead – the feeds and screens are glowing with yet more waffle and advertorials from the usual suspects (i.e. banks, politicians, estate agents and mortgage providers).
Top Bathtub Thinker Grant Shapps was one of the first in line to spread the word that he was "delighted" about another lender jumping on the high LTV mortgage bandwagon that has once again rolled into town amid the dog and pony show that is the NewBuy Guarantee Scheme.
It would seem Mr Shapps and his fellow gymnologists in the housing industry believe that being able to buy a house is still more important than being able to actually afford it. In addition, it should be noted that they also appear to be of the belief that buying a property with other peoples money when prices are falling and the economy is weakening is a good idea.
Still, as long as Grant Shapps is "delighted" I'm sure it will all work out.
The second (although related) annoyance this week is the speed with which certain lenders have jumped on the bandwagon side-car with shiny new banking products like "Save to Buy" to entrap the first-time buyer.
Whilst on the face of it this might sound like a reasonable ploy for all in that it generates cash for the banks and offers an "opportunity" for FTB's to get on the ladder as it were – it, like most new fangled mortgage products - falls over at the smallest of the first hurdles.
As much as the concept of encouraging people to save a fixed regular amount and offering them a mortgage as a carrot to do so is a good idea – the fundamental point is still the same. A 95% LTV mortgage in the current market place is not helpful!!!!
A few things I suspect most of us know:
Questions for the banking industry
We know all of the above, and (perhaps unwisely) assume you (the bankers) do too. Nonetheless, I have these questions for anyone who is in banking or mortgages and prepared to go on the record:
If you are in banking or the mortgage business – feel free to respond in the comments section below (no swearing please!). I am genuinely interested in discussions on the subject.
If you are not a banker or mortgage provider and would like some answers to the questions too – feel free to share this article using the social media buttons below and see if we can get some response from the financial world.
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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.