Monday, December 16, 2013

Even Danny Blanchflower thinks this is a bad thing

Cameron Hometown Booms as Easy Finance Raises Prices

Cameron’s efforts to spur the economy by supporting mortgage lending are fuelling 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 3.4x their annual income on average, matching the record set in August 2007. “It’s very dangerous to boost house prices, given they already start from an unsustainable level based on price-to-earnings ratios,” David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee, said. “There are no signs of wages rising, so buyers beware as interest rises eventually will come.”

Posted by little professor @ 10:39 AM (1410 views)
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One thought on “Even Danny Blanchflower thinks this is a bad thing

  • OK, reading this site for a few years now.

    Why are the numbers NEVER consistent?
    3.4 x their salary, though other people say the average is 4.something. Or its to do with multiple incomes at 3.5 + 2.5.

    Seriously people. What is the average? Where does this figure come from. What are we comparing it to?

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