le crunch

Headline news yesterday was that mortgage lending had dropped by over 40% and the number of mortgages taken out was at its lowest level for three and a half years. Well that latter bit of news is hardly staggering on its own. But if that relates to a 40% drop it means that mortgage lending over the last 3 and a bit years had nearly doubled. Now I can't see that the degree of home ownership had doubled in that period so why all the borrowing. Seems to me that it is likely to be folk extending their mortgage on the basis of rising house "values" and spending the money on other things like south sea holidays, and of course the rapid increase in people entering the buy to let market, with interest only mortgages being covered by rents. I am afraid that I have no sympathy at all for either of these groups of people if their little south sea bubble has burst and they are now left with mortgages that they can't pay back. Why the rest of us are having to bale them out I just can't see.
The blame for all of this sits fairly and squarely on the shoulders of those that believed in this money for nothing lifestyle but there is a a fair amount of responsibility to be levelled against a Government that has sat back and, if not encouraged it, done nothing to check such excesses, no doubt believing that such affluent, on paper, voters are their passport to everlasting Government.