I feel so sorry for the people who came late to the property market bubble. Through fear of missing out on ever owning a house, many were railroaded into taking on mortgages by estate agents, mortgage brokers and banks. Now, more and more are facing the grim reality that they would have done much better if they had waited a year or two. What were the banks, mortgage brokers and estate agents saying at the height of the bubble? Banks…. “Are you sure you don’t want to borrow more?” Mortgage brokers? “Blue skies ahead…don’t worry…interest rates will probably come down”. Estate agents…”you’d better hurry or you’ll miss out.”

As negative equity grows at the astonishing rate of 60,000 homes a month, ministers are urging the government to rescue borrowers. That sounds all well and good and nice like….but who pays for all this? The answer is that the people who DID have the sense to sit on the sidelines during the boom will pay, along with every other member of society.

I have no issue with people who lose their jobs having their mortgage interest paid by social security payments, but what I do take issue with is bailing out people who are coming off fixed rates who can’t afford the new repayments. The interest rates aren’t earth shatteringly different than they were a few years ago, although they are a bit higher, but why should my hard earned income be taxed away to help these people? Many of them bought with the sole intent of selling the property after a few years and now are unable to do that. They have learned a valuable lesson that the property market isn’t a one way bet, despite what the banks, estate agents and mortgage brokers told them.

If the government bails out these homeowners, it is exactly like them standing outside a bookmakers shop and handing wads of cash back to the losing punters from my pocket. It’s just not on!

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Tags: Bailout, Interest Rates, Mortgages, negative equity, Social Security Payments