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&#39One in 10 loans are for four times salary&#39

One in 10 borrowers are taking out a loan which is four times their salary or more, according to latest figures from the Liberal Democrats.

The LibDems say that during February, 10 per cent of people taking out a new homeloan borrowed between four and six times their income.

But the Council of Mortgage Lenders says one in 20 borrowers has a loan of five times income or more and one in 50 is borrowing more than seven times their income.

LibDem chief Treasury spokesman Vincent Cable says lenders and banks are fuelling the housing boom by allowing consumers to increase the amount they borrow.

The CML has moved to defend its members, saying that the majority of lenders will now take several factors other than income into consideration when assessing someone&#39s ability to pay back a loan.


Investec manages the situation

INVESTEC ASSET MANAGEMENT Investec Managed Distribution Fund Type: Oeic Aim: Income and growth by investing in fixed-income securities and UK equities Minimum investment: Lump sum £1,000, monthly £100 Investment split: At least 60% fixed-income securities, remainder in UK equities Isa link: Yes Pep transfers: Yes Yield: 4.75% Charges: Initial 4.5%, annual 1.25% Commission: Initial 4%, […]

Product matters

Co-operative Bank deserves a pat on the back for its sensibly structured 10-year fixed-rate mortgage. Whatever your view of Professor Miles&#39 findings and thesis, there can be no argument against allaying clients&#39 affordability fears and, for some, the certainty of holding today&#39s payments where they are, is absolutely paramount, particularly for those clients who are […]

NU looks at guarantee charge to boost equity backing ratio

Norwich Union is considering bringing in a charge for guarantees on its NU life & pensions with-profits fund to allow it to increase its equity backing ratio and avoid closing it. NU says it expects a number of life offices to follow suit as the only serious way to increase equity exposure under the new […]

Tilney Investment Management – Opal Tailored Solutions

Type: Capital-guaranteed fund of hedge funds Aim: Income or growth linked to the performance of the Opal Optimum Master Fund Minimum investment: Lump sum £10,000, Isa £5,000 Term: Five years and one month Guarantee: Secure income and secure growth options &#45 Original capital returned in full regardless of performance of underlying fund, high income and […]

The Rubik’s Cube: China’s policy trilemma

By Douglas Turnbull, Investment Director, Head of Chinese Equities China faces a ‘Rubik’s Cube’ policy trilemma, whereby it needs to sustain a minimum acceptable level of growth, deal with issues such as overcapacity and reform the financial system to make it a far more efficient allocator of capital. Given the contradictory nature of these objectives, […]


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