View more on these topics

LTV limit could mark return to the early 1960s

Having read Lord Turner’s review of regulation, my only comment is that he should wake up and smell the coffee.

If a cap on LTVs and income multiples is implemented this will be a retrograde course of action and take mortgage lending back to the early 1960s. In those days building societies restricted lending to a maximum of 2.5 x income.

It was as a result of the inadequacy of this policy that first-time buyers were unable to borrow enough to gain a foothold on the property ladder.

Harold Wilson’s government introduced a scheme that gave applicants the ability to obtain a slightly higher mortgage, as the loan was exempt from being eligible for Income Tax relief.

Lending does need to have an affordability matrix for making sensible lending decisions, and one that takes into account other levels of borrowings including credit cards and personal loans.

If this type of criteria had been implemented over the last mortgage feast, many aspirants to home ownership would not now be facing the dread of having their homes repossessed.

Geoff Laird

Buy-to-let Funding Services

By email

Recommended

No acceptable offer for Network Data

Network Data has revealed that despite interest from a number of interested parties, it has been unable to find an acceptable offer for the network.

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.