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Bloo Loo

History Never Repeats, But It Does Echo, 1998 Article With Charcol

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props beforehand...selling mortgages was easy...

"As 1988 began, the property market looked - to use a phrase from that era - unassailable. The year started with the average London house worth pounds 81,452, up an astonishing 50 per cent on the figure just two years earlier. Buying property looked like a sure way to make money. Many young people, fearing it might have been their last chance to get on the property ladder, clubbed their wages together and borrowed to the hilt. Lenders, desperate to maintain their market share, fell over themselves to accept business they would not even consider today.

Ian Darby, of independent mortgage advisers John Charcol, says: "It was an extraordinary period. House prices were steaming ahead and the only way it was affordable to buy for a lot of people was to join up as couples or join with friends.

"What it did was draw a lot of people into the market who weren't ready for home ownership. There were a lot of people with no savings and no history of affording large debt repayments. At that time you could have sold mortgages with a sandwich board on your back."

In this already feverish atmosphere, Lawson decided to give the pot an extra stir. He announced in his April 1988 Budget that - from 1 August that year - two unmarried buyers purchasing a house together could no longer both claim Miras. Instead of applying to each borrower individually, the relief would apply to the single property they were buying. The same principle applied to a group of buyers sharing ownership of the house."

Edited by Bloo Loo

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