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AMI: LTI and DTI caps will fail

Mortgage Introducer

August 18, 2015

Writing in August’s edition of Mortgage Introducer Robert Sinclair, AMI chief executive, says a £50bn rise in net lending over the past five years while UK residential property assets has risen by £996bn over the same period was testament to the fact it was cash driving up house prices – not mortgages.

He writes: “The volume and value of cash buyers appears to be the main driver of house price inflation. It is for these reasons that any attempts by the Financial Policy Committee to curb house price growth, with loan-to-income or debt-to-income caps, are likely to fail.

“Indeed all this will do is limit the ability of genuine purchasers who can afford and want to buy from getting on the housing market.”

Earlier this month Prime Minister David Cameron publicly raised concerns over foreign nationals buying homes in the UK – and London in particular – with plundered or laundered cash.

Sinclair agrees that the issue is a “genuine cause for concern”.

He adds: “With UK residential property assets now totalling £5.75 trillion, the £1.3 trillion of outstanding mortgage debt looks small.

“The fact this asset value has grown by £966bn in the past five years at a time when net mortgage lending has grown by less than £50bn indicated that it is not increasing mortgage lending that is the main driver of increasing UK property prices.”


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