Rachel Reeves will slacken off regulations on mortgage eligibility to 'boost home ownership' & this now seems to include relaxing 'stress testing for affordability' of mortgages.
As the housing crisis has been partly caused by the inflation in housing driven by slackening of mortgage limits in the past, the idea that further relaxation will raise home ownership seems nuts... its more likely to increase sub-prime lending & we have a v.g. recent example of where that leads....
#housing
h/t FT
Comments
Displaying 0 of 5 comments
Zach DeLong
In response to this post@ChrisMayLA6 oh boy, we have definitely been down this road before. I suppose actually doing something about affordability is too hard. Might as well treat symptoms.
Mentions: @ChrisMayLA6@zirk.us
Likes: 0
Replies: 0
Boosts: 0
JW
In response to this post@ChrisMayLA6
2 highly likely outcomes are increased house price inflation and further down the track more foreclosures. Depending on rental supply and competition, there may be an increase in rental prices (this happened in Australia)
The best ways to solve housing issues are to build more, both private and public housing.
Mentions: @ChrisMayLA6@zirk.us @ChrisMayLA6@zirk.us
Likes: 0
Replies: 0
Boosts: 0
NatalyaD
In response to this post@ChrisMayLA6 Isn't this just likely to push house prices EVEN higher as well as cause scary debt issues...
@NatalyaD
I think so...
by Emeritus Prof Christopher May ;
Mentions: @ChrisMayLA6@zirk.us
Likes: 0
Replies: 1
Boosts: 0
Boris Barbour
In response to this post@ChrisMayLA6
Is there a good reason for the UK not to offer fixed-rate mortgages? Pretty much every mortgage in France is fixed-rate for their whole duration. 20 years is not uncommon.
@BorisBarbour
There are many fixed-rate mortgages but these are fixed for a period not the duration of the loan... of course, in the US too, most mortgages are fixed rate for duration.
by Emeritus Prof Christopher May ;
Mentions: @ChrisMayLA6@zirk.us
Likes: 0
Replies: 1
Boosts: 0