Speaking at the London Mortgage Business Expo, John Wriglesworth, chief executive of the Wriglesworth Consultancy, said he believed lending seven, eight or nine times borrower’s income would become common practice by the end of next year.
Wriglesworth said: “You could see lenders going to seven, eight and nine-times as high as it is on long-term fixed rate products. However, lenders doing five or six times income on variable rates is a disgrace and should be banned. I expect to see cases of mis-selling in the future.”
His views on long-term fixed rates were backed by Jonathan Cornell, technical director at Hamptons International Mortgages, who believed up to eight times would be the rule rather than the exception in the near future.
However, he insisted lending that high wasn’t irresponsible if it met the borrower’s needs.
“In my mind, no one is doing anything irresponsible and there are two words which I think get forgotten far too often: caveat emptor. You can’t force people to take out mortgages they don’t want. Borrowers have to apply for them and if they chose to borrow money they need to consider the risks attached.”
Ricky Okey, managing director of intermediaries at Abbey, said: “There is something sensational about nine times, but the sooner we stop talking about income multiples and concentrate on affordability-based lending, the better. “
