Home loans could jeopardize our economy
The future success of the UK’s economy will be dictated, directly by consumer borrowings.
According to a new report, it is imperative for UK citizens to cap their borrowing levels now or risk a major financial decline. Our current economies strength is said to rest on unstable foundations formed predominately by homeowners securing loans against equity in their properties, and continually sourcing other forms of credit.
Many people are living beyond their means, and as a nation we are responsible for a combined debt of almost 1.5 trillion pounds. Many lenders have relaxed their criteria, enabling people with a “not so perfect” credit history to qualify for loans, mortgages and other types of finance.
For many people, our current nations strength is providing credit opportunities that they may not have been privy to otherwise. For the time being it causes little problems, however the fear for many analysts is that a sudden change in our economy could have a hugely negative impact on us all.
With increasing interest rates, echoes of the housing market crash of the early nineties are becoming all too familiar. However, many first time buyers have little to no recollection of the crash, which analysts are popularly referring to as “the boom and bust cycle”. It is likely that analysts will use housing market trends as a primary means to indicate what lies ahead.
