Housing Future Looks Bright But is Dependent on the Job Market: Diana Olick
Powers included imposing requirements on how much cash lenders hold and recommending tighter mortgage affordability tests to regulators. The statement from the committee – which monitors risks to financial stability – follows a meeting last week, the first under the stewardship of Mr Carney since he took the helm at Threadneedle Street in July. It noted that a recovery in the banking sector had led to easing credit conditions and an improving housing market, with mortgage approvals in July up 30% year on year and average house prices 5% higher – with London leading my company the increases. But it said activity in the market and the ratio of loans to the value of properties remain below historic averages. The costs to households of servicing their debts were also low and the ratio of house prices to earnings was at the level of a decade ago.
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All that’s very nice. Good luck implementing it in a way that bankers can’t get around. For example, bridging loans for a deposit are already common. And if lenders are willing to fudge their client’s income and assetsto get past lending standards, a story which we have been documenting for months in the Daily Reckoning, they’re willing to fudge the value of a house. Here’s our solution. Bring back Hammurabi’s Code.
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Australian Housing Market: Mortgage Lending in the Spotlight
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