From: nowhere@home.com
Newsgroups: uk.finance
Subject: Re: Mortgage rates and inflation
Date: Fri, 25 Jul 2003 10:14:40 +0100

On Tue, 22 Jul 2003 00:49:58 +0100, Richard Faulkner
 wrote:

>Assuming the person looking to move up the ladder bought their current
>house 3/4 years ago, or more, they are going to have a sizeable chunk of
>equity. lets say they bought a £40,000 terrace in 1999 that is worth
>£90,000 now.
>
>With the advent, (in more volume), of non status mortgages, the size of
>a loan need only be limited by the desire of the borrower to borrow, and
>their "deposit".
>
>Thus, with £30,000 of equity to deposit on the next house, (setting
>aside £20,000 for "things", most people can borrow up to £170,000 to buy
>a £200,000 house. Not a bad jump up the ladder from their £90,000 house.
>

Most people cannot get a £170,000 mortgage!  If you assume a 3.5x
salary increment then they must earn at least £48,571 pa., somewhat
higher than the national average income.  Considering your
hypothetical buyer bought a £40,000 house in 1999 (on a income of
£11,428?) then he must have had a pretty good pay rise in the
meantime!

Mark