Mortgages Uncovered

Alistair Darling continues to emphasise that the UK mortgage and housing market is still stronger than the US market.  My concern is that the UK market is only moments behind the US – you know the saying ‘when the US sneezes, the UK catches a cold’

In America, sub-prime borrowers have been at the heart of their problems with many people defaulting on their mortgage.  Unfortunately, banks had invested heavily in sub prime mortgages over the last few years.

Darling insists these problems are far less in the UK.  The key difference he stated on Wednesday in his talk to the Treasury Select Committee is that in the US the supply far exceeded demand and hence house prices suffered drastically.  In the UK, we have far stronger regulation on mortgage sales and hence a low default rate.

Is he deranged?  I may well be the subject of scaremongering from the press myself, but reading our article on the 300,000 people in danger of default, knowing the increasing prices on supermarket basics, gas, electricity and fuel costs plus knowing that many people stretched themselves as far as they could when they bought their house – I think many people are going to have a huge shock when their special rate deal ends.