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 ...
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