"First-time buyers desperate to get onto the property ladder are being offered loans of up to five times joint salary levels, according to a report in today's Financial Times.
Abbey, which is Britain's second-largest home loans provider, has raised the standard amount it will lend to house buyers to five times their single or joint salaries for those with an annual income of £50,000 or more...
The move by the Abbey comes amid a growing debt problem in Britain, with record numbers declaring personal insolvency, and has alarmed debt counsellors. A couple on a joint income of £50,000 who borrowed £250,000 would have to meet monthly repayments of £1,400, but that would increase if interest rates were to rise, as they are expected to in the next few months."
So, on a joint income of £50,000 per year, the couple would have to pay out at least £16,800 (and possibly more) in mortgage costs. And because of the increased availability of loans, house prices will continue to rise. And, if our couple can't manage the re-payments, the Abbey won't lose out as it will re-possess.
These days, I feel sorry for young couples.
No comments:
Post a Comment