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Agree with your investor points.
In terms of LTV meaning mortgage rate increases, I guess this is why banks stress test based on higher interest rates. Perhaps all the "I pay £1500 PM rent so why won't a bank give me a £1000 PM mortgage" people of the last few years will start to understand why.
leggy_blonde-
Oh yeah completely, all the affordability tests clearly have a purpose. I only picked up on the other bit as I often hear people run the same argument you did about lower prices actually being better as the next property up is cheaper, etc but I think it always ignores that homeowners need low ltv for things to be cheap / easy - so the impact is felt more widely than just those who are in or close to negative equity
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I think their point is not about how large a mortgage they can get but that a deposit is seen necessary.
andyfallsoff
Dramatic_Hammer
Yeah I just don't see much reason to suspect investors have more of a capital gain that can be soaked up than owner occupiers - probably less as they may have interest only mortgages, professional investors will have gearing targets, and investment horizons are probably shorter than how long it is between home moves.
I take your point on no negative equity but it's not just that - it's anything that pushes your LTV to a bad level that makes price drops a problem. You don't have to be underwater to find going from 75% ltv to 95% sucks