domingo, 3 de noviembre de 2013

Hassan Draper

Just talking about the 80's brought back memories of how much mortgage
lending has changed in comparison to today. Does anybody remember
‘MIRAS’? I shall make it easy for you, it stood for Mortgage Interest
Relief At Source.

Imagine applying for a home loan mortgage today, and getting tax relief on
the interest of the payment. It made interest only mortgages very appealing
to a higher rate tax payer, this leaned even more to your advantage. The tax
relief was aimed at the first 30k of mortgage which was applied for in a
single name and even up to four different names. So a total loan of 120k
could, in theory, have tax relief. This made it the cheapest amount of money
a person could borrow at the time. I think like most good ideas, the
original intention was to be able to give first time buyers a helping hand
at the start of the property ladder.

However, just like many good ideas, someone thought to toy with the original
idea and helped many people with school fees or even a directors loan into a
company from his own home, as the scheme was also allowed on re-mortgages.
When the incentive was withdrawn in the late 80's, it created a buying
frenzy. This is because everybody wanted to jump onto the property band
wagon and for the outcome house prices spiralled even higher until the
property market collapsed in the late 80's/early 90's.
We were at a point where, for the first time, millions of people had the
opportunity to purchase their first house and when millions were truly
bitten by the property bug.

By Hassan Draper

Hassan Draper started in financial services back in the mid 1980 as a
manager specialising in mortgages and commercial loans.