The Biggest Threat Is Within

It’s fair to say that property ownership is a big deal for us Brits……but so is property debt:

 

84% of all debt in the UK is mortgage debt.

 

Before the banking crises, total mortgage debt in the UK was the equivalent of 38% of the total annual money made in the UK. We then loosened the criteria for lending (you literally had to be breathing to borrow money – although I believe there were cases when even that wasn’t compulsory) and that figure now stands at 76%.

 

Mortgages are a big deal - interest rate rises are a big deal – monthly mortgage payments are a big deal.

 

This is why the biggest threat to the continued recovery of the UK economy is the housing market. The Bank of England / Government know this but they are powerless to control it as the banks hold all the aces.

 

We all have ‘some’ control over the interest rate we pay on our mortgage. But the window of opportunity is getting narrower and narrower……especially as the Bank of England warned last week that it could now be as early as Q4 2014 that rates rise.

 

You have been warned!