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Property lease options could be the way forward as loan to value could be capped
Property lease options could be the way forward as loan to value could be capped
Former cabinet secretary Lord O’Donnell has urged the Government to introduce plans to introduce a loan to value (LTV) cap to try and bring the borrowing figures under control.
KENSINGTON,
London,
United Kingdom
(sardnews.org)
07/12/2012
Former cabinet secretary Lord O'Donnell has urged the Government to introduce plans to introduce a loan to value (LTV) cap to try and bring the borrowing figures under control.
Lord O'Donnell believes that the UK should follow Canada's example and put in place stringent limits on borrowing, with a guide of 80% loan to value. He believes that the Canadian banks are good role models and that given their strong financial history we could learn lessons from them and follow their example.
He believes that the best way to do this is to think about the level of loan to value ratio, and that we should not veer back to a time where borrowing was easy and the results catastrophic.
Chancellor George Osborne, earlier this year, outlined his plans to give the Bank of England's financial committee the power to limit high LTVs in order to control lending levels in this country.
Reena Malra has discovered and developed strategies to take the focus off the property price and put it on the flexible and convenient payment terms. This is how Reena can structure transactions where the Buyer and the Seller both get what they really want by establishing their circumstances, motivation and needs. She has mentored 100's of investors and specialises in property lease options, instalment contracts and rent to buy. She says:
"I do believe we do need to keep a check on loan to value (LTV) ratio to keep control of lending so it doesn't get out of hand as it has been. Lenders need to ensure that they do enough due diligence on candidates about their income, expenditure and affordability before accepting their applications. This has been happening in recent years, and as a result it has been more difficult to secure lending and many people have been locked out of the housing market, with young people unable to get their foot on the housing ladder even if they have a secure job and consistent income. Lenders now require larger deposits, and for the self employed who previously relied on interest only and self certification deals, they are simply unable to purchase a family home.
"It is important that we keep the right balance for the economy to grow and not cap unnecessarily but be more cautious in lending criteria.
"I would suggest looking at alternative ways of buying and investing which is not restricted by loan to value and where you are recycling the same loan and helping the sellers and buyers in the process. This could be in the form of a property lease option, instalment contract or several other methods that I teach and mentor to my investors. There are ways around the problem of strict lending, which are not only low risk but benefit both the seller and the buyer. We need to educate people about the alternatives and how they could benefit people who are unable to buy a property due to lack of lending, because they have a poor credit rating, are self employed, over the age of eligibility for a mortgage or don't have a large enough deposit."
Notes to Editors
Reena Malra has mentored 100's of investors, both novice and experienced. Her techniques are empowering new and seasoned investors to successfully structure profitable property lease options, instalment contracts and other creative deals from start through to finish. She has been interviewed several times on Sky TV as a guest speaker giving expert advice on property lease options and instalment contract, and has also featured in "Property Investment News" magazine explaining the pros and cons of doing creative strategies. Find out more about what a property lease option is and listen to Reena Marla's interview by clicking here. Click here to find out more about how Reena Malra can help you buy a home with little or no money down
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About Reena Malra
Reena Malra has mentored 100’s of investors, both novice and experienced. Her techniques are empowering new and seasoned investors to successfully structure profitable property lease options, instalment contracts and other creative deals from start through to finish
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