About 20 years ago the UK housing market was turbot, prices were rising much faster than inflation while people claimed to invest in property and to move from renting to home ownership. It seemed that buying property was similar to print money, you just couldn 't lose, or you could? While prices have continued to rise relentlessly happened, the properties have become irreplaceable while interest rates the bank continued to be upward. People had borrowed up to 5 times (and more) their annual income, could no longer afford the mortgage repayments as interest rates the bank nearly doubled during 2 years. The result? A huge increase in mortgage arrears and buying property. The big question is repeating itself in history? A short answer to this problem is very likely, unless the market changes its habits. In 2003 BRITISH low rates of the bank reached a low point of 3.5% in early 2007 that the low rate was 5.25%, this represents an increase of 50% in less than 4 years. It was united with the increase of people from low rates of bank lending also on ever higher multiples of their income, an annual income in some cases up to 7 times. These higher loan will make people even more vulnerable to further increase more in low rates of the bank, so it doesn 't take much thought to realize that the UK property market is at least stretched, the more likely it is stretched to a point which could break. Looking back on history 20 years ago then the United Kingdom will reach a situation where the bank's low interest rates reach 6.5% – 7%. Already there are projections that low rates will increase to 6% most of 2008, if this happens there will be a huge increase in mortgage arrears, given that many will be too late to stop the repurchase of their homes. This is a very terrible, the best advice anyone can give is not sovraestenda when you buy a property, ask the question, can I afford my mortgage rates low if the bank increased to 6% "excessive, if the answer is no, then don 't. affair
Gordon Marsden
Dec 10