Saturday, 28 March 2009
Look back in anger
I had forgotten how deluded people were during the boom. Look back in anger at how we talked up the housing market and created the greatest banking crisis in history.
I feel so sorry for Carla, a first time buyer, who thought she might have borrowed too much to finance a crappy flat.
Check out the financial advisor; the bubble facilitator who recommended that professionals "take out an interest only loan for a few years".
It is not hard to see how we got here.
According to the "soot and ashes" blog, this newsclip is from 2006.
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5 comments:
Ah those were the days; cheap credit, estate agents, and housing inflation.
Where did it all go.....
That is one of the more balanced BBC reports I have seen. It must have been later that year that they started on their 'good news house prices have gone up 2% this month and Northern Rock are now helping first time buyers get on the property ladder by offering 6 times their income and 125% Loan to value'
The key part of this article was at the end.
Carla gets the same amount of housing in 2006 as she would had she bought in now.
However the price is radically different.
The problem ? The Tsunami of cash from the Gulf and Far East which our banks helpfully turned into mortgages, creating an asset bubble.
Plenty of the middle men became rich, but then end result was Carla over paying for her flat for a very long time.
This issue is the dog that has refused to bark in this recession
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