WHERE WILL IT STOP? The housing market is on fire and there seems to be no shortage of people willing to pour petrol on it.
The FT reports this morning that Abbey, one of the UK’s largest mortgage lenders, is planning to lend homebuyers up to five times their single or joint salaries. This is the same Abbey that published research a few days ago that one in eight people cannot afford to get on the property ladder.
Abbey is not on its own – last week two other lenders increased their income multiples to 4.5 – but it is also relaxing its other lending criteria, including those for approving mortgages without proof of income. Abbey spokesman Dave Stewart told the BBC:
‘Our customers are continually asking for more money to purchase the house they want and subsequently we looked into the affordability ratings of certain people. We found that people could afford to pay out for bigger mortgages but there just wasn’t anything on the market at the moment offering them what they needed.’