This week’s comments were in response to the findings of a House of Lords report that said government home ownership schemes did not offer value for money and inflated house prices.
DerKrobsen said: “Crikey, what a surprise. Everything the government does adds to house price inflation, back to Miras days, and the tax reliefs before then. Also, over-generous lending multiples. All in favour of the banks, of course, at the expense of personal debt.”
Barry Davis added: “Well how clever a great deduction, only just worked it out have we? It has been like this for the last 20 years since new-build shared ownership is way overpriced and the rental is calculated on what is current day rateable values, making the rent proportion excessive. Older second generation properties are far better value for money.”
ERCs limiting later life mortgage rebroking
The third comment of the week was in response to Air Group chief executive Stuart Wilson’s blog suggesting that later life advisers could learn from mainstream rebroking habits.
Adrian Seager said: “Very difficult to rebroke when having to add early repayment charges (ERC) to any rebroking exercise. Last case I tried was an existing 7.5 per cent loan with Just and [the client] considered a move to Aviva at 3.23 per cent.
“Even after 19 years, the gross loan amount repayable to Just when compared to the projection for Aviva, after adding ERCs to the start loan amount, was still lower with Just. Existing lenders know that during the ERC period the business is fairly safe, but once outside of any ERC, that will be a different story soon.”