Quote cod'ead="cod'ead"Back to the original topic for a moment.
I see Mark Carney has now warned against anyone overstretching themselves on a mortgage. With interest rates at a historic low for so long, he's afraid that many will extend themselves in the hope that house prices will continue rising and when interest rates do rise, there will be sufficient realiseable equity in the property to avoid foreclosure. That is the economics of stupidity, especially given the 'help to buy' scheme. Even without interest rates getting into double digits, a lot of new buyers will struggle with just a 1% increase.
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He's doing the correct thing by warning people. IMO the government is cynically and irrationally manipulating the housing market as the aspirations of the young to create a "feel good" factor in the hope of gaining a Tory majority in 2015. As soon as the election is out of the way they won't give two hoots for those same people when they are stuck in negative equity or worse.