Police and warranty work

When I was bimbling around Allans Ford in Coventry, I noticed rather a lot of police cars parked in the car park. When commenting upon this to the sales person, he mentioned that for some reason police cars get rather a lot of warranty work in their first year or two. Who'da thought it?

On an unrelated note, if the sun is in your eyes in the morning, then it is also in the eyes of the driver behind you. Thus it's probably a good idea to turn your lights on, so your car stands out. Yes, it might be daylight and it might be bright, but additional contrast so your car stands out means you're less likely to get someone driving into the back of you.

Mortgages

On the radio this morning was a news article about how Abbey National are relaxing their limit on how much money you can borrow on a mortgage.

BBC Link.
Summary? Abbey have said 'ok, you can borrow 5x your salary, rather than the traditional 3.5x'.

There was a little bit of froth from someone who was saying that this was bad, because now people would be looking at 200-250 thousand pound houses. Now, I'm not sure about anyone else, but I always thought that 40-50 grand a year was a quite well above average salary.

Now, I've just had a look at house prices around coventry: http://www.upmystreet.com/property/prices/l/Coventry.html

What that one says is that Average price of a house in coventry in the first half of 2006 was 147 thousand. With a detached averaging at 304 thousand, and a flat at 117 thousand.

A 3.5x mortage means you need to be earning 33,000 a year to afford an 'average flat'. Even a 5x requires 23 thousand pounds a year. I seem to recall that's quite a way above an 'average salary', although I'll admit I've not actually checked recently. Is it only me who thinks that 'average salary' should be able to afford an 'average house'?

There's actually a nice graph at the bottom of that BBC article, that's saying currently 'average house price' is actually 6.1x 'average salary'.

Of course, lets not even start on how much pain is involved in a 5x mortgage over a 25 year term. Rough guessing at rates suggests that it'll be about half of take home pay. 5% rate, 147k, 25 years is about £850 out of a £29,400 salary, of which you'd actually see about £1600-1700, so around half.

Personally I think upping the cap isn't all that bad an idea. Quite a few people were using the 'self assessment' deals to lie anyway. Of course, it also means that there will be a swathe more people able to buy into the property market too, which will probably serve to spike prices even further.