Not My Problem, Mate

I heard on the radio this morning that UK mortgage lenders are taking the unprecedented step of calling for interest rates to go up, to cool the increasingly overheated UK property market. They believe that people are taking on commitments that they can't afford, leading to fears that the market will slump.

I don't know enough about the economy. One day I will buy a big fat book called Everything You Ever Wanted To Know About The Economy In Four Thousand And Twenty Six Easily Digestible Pages and will better understand the global pros and cons of interest rate fluctuations.

Until then, here's a layman's view: maybe, if the mortgage lenders are concerned about potential defaults on payments (not to mention the untold misery caused by mortgage repossessions), those same organisations could show some responsibility and lend a little less money to customers in order to mitigate this risk?

Posted by Hg on Tuesday 25 June 2002 at 16:34.
Received 4 comments so far.

That would be so NOT fair. For people like me, who just want to pay what we pay now (or less...!) and also for industry which wants...needs...lower interest rates. If we were in the Euro, maybe we would have lower interest rates

Comment by Gert on Tuesday 25 June 2002 at 13:52.

I've made a vow not only to refuse to understand the economy, but also to refuse to understand mortgages until somebody gives me one that will actually allow me to buy somewhere.

Oh, and I'm also holding out until London property prices drop back to a reasonable level.

That sound you can hear is a whole phalanx of flying pigs flapping over the horizon. Sigh.

Comment by Vaughan on Tuesday 25 June 2002 at 18:08.

Here here!
Having bought our house last year we endured several conversations around the amount we could borrow based on our salaries. E.g. "You can borrow £110k"
All we were worried about was the monthly payments (to ensure we could meet them). Yet it took 5 meetings with our lender to convince them that we didn't want to spend £110k on a house, and would rather spend a lot less to make sure we would be able to pay the damn mortgage...
All the while I'm thinking - why am I the one pushing this?

Comment by Gordon on Wednesday 26 June 2002 at 02:41.

Ah but the thing is, if they just don't lend they don't make any money whereas if rates go up and hence prices down they can continue to screw as much cash as possible out of people in safety :)

Comment by Jo on Wednesday 26 June 2002 at 04:18.

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