MichaelCD - The Blog.

The thoughts of Michael Cadwallader. Coffee loving, history book reading, Cheshire man.

Friday, August 18, 2006

Housing and Mortgages

This week, the Daily Mail had another story about first-time house buyers:
Increasing numbers of desperate first-time buyers are gambling with their new homes by taking out interest-only mortgages without any means of repaying the capital.

Rising house prices are forcing first time buyers to borrow record amounts to buy a place of their own.
And the larger mortgage payments are putting budgets under strain.
What nonsense! There is nothing “desperate” about them. And they are certainly not being “forced” into anything. They’re greedy and irresponsible. In an attempt to shortcut their way onto the property ladder, people have taken on ludicrous mortgages; it’s no wonder that the housing bubble has stoked back up again. They do so not out of desperation, no, these are the sort of people who invite their friends around to a dinner-party and spend all evening bragging about the rise in the worth of their property.

The media should instead, feel sorry for those who suffer the consequences of this one-upmanship. People who are sensible enough to save money and wait for house prices to stabilise, are being gazumped. Then, these people truly will be desperate, and they will take risks as well. And thus, the pyramid scheme that is the housing bubble continues to spiral out of control.

Now, I am not sure whether the housing bubble will burst, but if it does, those gamblers who had been relying on equity from the sale of their house, will be left high and dry. They will blame the Banks and Building Societies, the Chancellor, the BofE everybody but themselves. After all, nobody takes responsibility for their actions nowadays. But, for me, these idiots are headed for a deserved fall.


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