What is it about the drive to get on the property ladder that stops people thinking sensibly?

Interest rates are soaring and the stock market is crashing around our ears, signalling the possibility of an economic downturn, yet a third of under 35s say they would happily take out the largest mortgage they could get their hands on.

According to insurer LV= (formerly the far more sensibly named Liverpool Victoria), 15 per cent of this age group would be prepared to borrow more than four times their annual salary.

This craziness has taken strongest hold in London and the South-East, where 7 per cent say they would borrow six or more times their salary.

Nigel Snell, LV=’s communications director, says: “What concerns us is just how many younger buyers are prepared to stretch themselves well beyond traditional lending limits.”

Quite.

Borrowing at this level leaves you so much more vulnerable to all manner of disasters.

There’s falling property prices, rising interest rates, job loss, ill health or serious accident… Need I go on?

This entry was posted on Saturday, August 11th, 2007 at 9:34 am and is filed under UK Mortgages, UK Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.