New Rules

The FSA want to make it impossible to get a mortgage without proving your income. So unless you have payslips or a P60, or 3 years accounts or tax returns, it will be impossible to get a mortgage. And even then, your mortgage  will be limited to, typically, 4 times your income – maybe 5 for some people.

The effect will surely be to stop house prices taking off as they have previously. With lenders cracking down on interest-only mortgages at the same time, I expect the effect will be that house prices will not only cease to rise as much as they have done, but quite possibly result in prices actually falling again, especially when interest rates are eventually increased, which I expect to start in early 2011.

This should see a return to the days of buying a property as a home, rather than as an investment. So if you are planning on buying soon, be aware that your home may end up being worth less than you paid for it for a few years to come.

This entry was posted on Tuesday, July 13th, 2010 at 11:16 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.