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Cameron Hometown Booms As Easy Finance Raises Prices

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http://www.bloomberg.com/news/2013-12-16/cameron-hometown-booms-as-easy-finance-raises-prices-mortgages.html

Peter Saunders had to stretch his resources to buy a house this year in Prime Minister David Cameron’s constituency town of Witney, where values have risen at twice the U.K. average over the last three months.

The 27-year-old hotel manager said he needed money from an inheritance as well as a mortgage to afford the 200,000-pound ($325,000) Witney home in Oxfordshire. The market town, which has a 13th-century church at its center, is surrounded by rolling hills and farms. Oxford, 13 miles away, is even more expensive, he said.

Cameron’s efforts to spur the economy by supporting mortgage lending are fueling price increases across the country, prompting buyers to extend their credit and leaving them vulnerable to interest-rate increases. People purchasing a first home in the U.K. are borrowing 3.4 times their annual income on average, matching a record set in August 2007, according to data compiled by the Council for Mortgage Lenders.

“Witney is a bit of a bubble,” Saunders said. “We kept hearing in the news about how the Bank of England is feeling more positive about the economy and how interest rates might rise quicker than expected, so we went with a five-year, fixed-rate mortgage.”

Clear signs of recovery....

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I see in the news the Irish have sorted themselves out....it seems actually cutting spending, paying back debts and letting house prices collapse might have been the way to go.

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