Bradford & Bingley's mortgage product launched yesterday has drawn criticism from mortgage sector analysts and MPs for possibly plunging borrowers into negative equity at a time when house prices are predicted to do nothing or even fall through the next year.
The Times writes that the offer of loans up to 130% of the value of borrowers’ homes is seen as going against the trend, and comes even after the Bank of England warned of the UK’s £1trn household debt load. “I would like to see the committee investigate such high-value loans before they become a trend,” the paper quotes Treasury Select Committee member Nigel Beard. Adds Ciaran Barr, chief UK economist at Deutsche Bank: “House prices are expensive and they are unlikely to continue rising in years to come. Borrowers should definitely not be taking out any mortgage which is bigger than ...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes