Yoosk today! - Question - I would like to know why the banks are being given a limit on how much they are able to lend to first time buyers. It was 5 times a person's annual salary and it's being dropped to 3 times now. What about...

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Gordon Brown, I would like to know why the banks are being given a limit on how much they are able to lend to first time buyers. It was 5 times a person's annual salary and it's being dropped to 3 times now. What about those of us that don't earn a huge amount of money but want to buy their own place? For some of us, 3 times our annual salary wouldn't even buy a bedsit in London. Apart from that, I hear that 100% mortgages are being abolished too so somewhere we have to find extra money that we don't have. How are people supposed to get on the property ladder under these circumstances?
Asked by DebbieC on Mar 18 2009 2:01:21 PM and supported by 11 members
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2 comments

shazkl at Mar 19 2009 12:00:00 AM : I sympathise with your plight Debbie - but isn't what you are asking for exactly what has got us into this financial mess now - Banks lending more than people can afford to pay back?

Surely, the answer is for house prices to come down to a level where they are affordable - bad luck for the many who like to sit at home and look at their house's value in the property pages of their local newspaper and for those who would end up with mortgages higher than their properties value - but would be good news for young people waiting to get on the property ladder.

DebbieC at Mar 19 2009 12:00:00 AM : Shaz - I see where you're coming from, but I think the main problem with what has happened with the banks has not been the lending but the fact that they put huge amounts of money into investing into foreign banks and have taken a risk. For people like myself, we are already paying rent, so why would we not have the money to pay back a mortgage? At least my money would not be going to waste and instead going towards a property that I owned. The problem with the lending is that people have gotten themselves into large amounts of debt that they can't pay back. I don't have any debt but would like to get my own place and a mortgage would be my only debt.

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