Potential homeowners who apply for a mortgage could face a tax investigation as part of a new fraud prevention scheme.

Want a mortgage then you have to face this.

http://www.telegraph.co.uk/finance/pers ... tions.html


A bit late. This should have been in place for years.

Yes especially before a property bubble occurs. I wonder what the reason for it starting now is?

At a wild guess, it could be irresponsible loaning of money by the banks and rampant fraud by people "desperate" to buy a house at any cost.

Yes especially before a property bubble occurs. I wonder what the reason for it starting now is?

Well if you declair to HMRC that you earn £50K (and pay tax on that)
but
For your Mortgage application you say you earn £100K
then somewhere you are lying and either
hiding money for HMRC and so owe back tax
or
have fradulently filled in a loan application and so will go to prison

The choice as they say is yours

I think in the past the lenders were very slack in terms of lending criteria and so as you say fraudulent loans were given, but many people also did it as their only way of getting on the property ladder.

Over the next few years prices will slump and its attraction as an investment will vanish. ..... The whole property market has turned out to be a giant Ponzi scheme requiring more people to buy at ever higher prices to sustain them. With real wages stagnant in the UK since 2003 the property bubble was doomed.

Unfortunatly with a very fixed supply and increasing demand (more single households, net migration in etc) there is increasing demand. This is fueling an increase in rents so although the large capital gains may have gone for the "buy to rent" people they are still making a very good return on thier investment by increasing rents (returns). This means that prices will stay stable for some time to come - personally I think they will stay static and so will be erroded by inflation rather than any dramatic falls

One thing that worries me about this:
In my experience, HMRC couldn't organise a piss up in a brewery! They're probably ruin the chances of many people of getting the house they want by mistake.

I may have slightly exaggerated my earnings in order to get a mortgage. The broker positively encouraged me to do so. It went like... "I get overtime, I'm hoping for loads, and the car is worth 4K and there's my on-call payment and can I add expenses?" - the total was nearly double my actual pay.

However, I chose a fixed interest rate and repayments I knew I would be able to meet. It's less than the rent on a 1 bed flat in a cheap part of London...