Mortgage Woes

Could the unthinkable really happen? Could Britain's biggest mortgage lender really go bust? Well, on the 17th September 2008 it nearly happened, but in the event it didn't, thanks to some hasty reappraisal by the Government about competition rules. Of course they wouldn't have allowed it to happen anyway, but to ordinary people with a mortgage and depositors with a few quid put aside, it was and is, a worrying time.

It was not just HBOS Britain's biggest mortgage lender that was in trouble. The problem is that high flying bankers, have been lending money they haven't got, to people who couldn't afford to borrow it, on the back of a housing bubble that was sure to burst. But of course the government couldn't afford to let the bubble burst because they had staved off a recession by turning a blind eye to an unsustainable boom, almost encouraging people to live beyond their means, as they borrowed and spent against inflated house prices.

Please Click Here to visit the Free Mortgage Advice Web Site.

Even now there seems to be a reluctance to state the obvious, and that is that the housing market had seriously overheated, both in the UK and on the other side of the Atlantic. Why can't, at least the British Government, realize that the enormous rise in house prices was unsustainable, and that a return to an appropriate level is in everybody's interest.

If you were a newly qualified nurse or similar professional person you might expect to be paid around £20,000 per annum. If the average house price was £160,000, then it's difficult to see how you could ever afford one, at 8-x salary. Remember that it's not very long ago that the average was £60,000, and just about affordable for many prospective first time buyers.

Since that time there has been an unregulated unaccountable rise (bubble) that very nearly led to the ruination of all concerned. Even now politicians seem reluctant to allow house prices to reach a proper market level, and talk in terms of stimulating the housing market, kick starting the housing market, or whatever. Surely it would be better to allow prices to regularize with normal market forces.

Tinkering with markets is not something that the British government should be involved with, but proper regulation, that's a different matter. Grotesque bonuses have been on offer to banking executives as the property bubble was allowed to expand, and taken out of the government's inflation indices. The best that could happen is that house prices find an acceptable level that is affordable without people mortgaging the rest of their lives!

Please Click Here to visit the Free Mortgage Advice Web Site.

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mortgage woes
mortgage woes