Economic stability has been one of the goals of the current British government. One of the measures of this has been the interest rates that people pay to build businesses and to buy their property. In the last ten years the mortgage rates have been tethered in a tight band that has enabled people to plan with greater confidence. The downside to this is that young consumers. those looking to buy their first or second houses, are not considering the risks of interest rates in the mid teens. This has encouraged them to stretch their finances further in the belief that interest rates will always sit in the comfortable 5-8% band.
My first mortgage in the mid eighties went, if I remember correctly, up to 16% but this was not an issue as I was subject to stricter rules about income multiples than current borrowers.
Which environment was better? The current bubble and reckless pursuit of growth has led to masssive immigration and an overheated economy that is going to come down with a bump.
There will be tears before bedtime!
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i hope something will be better in coming times ,
Comment by North Cyprus property October 15, 2007 @ 3:48 am[...] “The Pakistan crisis threatens economic stability” [...]
Pingback by The Pakistan crisis is a good example of a messy problem November 6, 2007 @ 4:14 am[...] collateral as security. This is another downside to government intervention that has combined with excessive stability to produce the biggest bubble in money supply that we have seen so far. No Comments so far [...]
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