Boom to Bust : Mortgage Pressures

“I will not allow house prices to get out of control and put at risk the sustainability of the recovery.”

Gordon Brown, 1997 Budget Statement.

The data for mortgage repayments as a proportion of post-tax income has just been published by the Bank of England. This shows how much of your salary goes towards keeping the roof over your head. With tax thresholds too low, property prices too high and interest rates rising the pain is starting to show, not just in devastating home repossessions, but in reduced disposable income for all. Whereas in the nineties less than a tenth of your take-home salary on average went to service the mortgage, it is now, after a decade of Brownite economic stewardship, nearly one seventh of your net income. Brown has not kept his 1997 promise…

Source : August 2007 Bank of England Inflation Report.


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