Individually no, but collectively they could but are they willing to? I doubt it. Many will have got rich because it works in their favour. Sod the masses.

Yes but the coalition probably get the bulk of their support from the rural areas. Though I guess that they are in hock to the few party donors who live in London and want the current crazy financial system to continue.

Yes but when interest rates do go up AND they definitely will, to above 5% with a few years you will lose your home, because you over paid because and that high multiple will mean that you have levered yourself to the hilt. Unless of course your pay will increase 1000% to maintain the affordability. You ignore that for decades and even centuries we had interest rates above 5% and people were still able to cope because the multiplier was lower. Higher multipliers described as affordable because of low interest rates were a marketing gimmick to sell you that overpriced hovel. The interest rates we have now are totally unsustainable. If they carry on like that your pension will be destroyed by such low rates. You cannot have it all ways. Paper wealth through a asset bubble is very transitory. Look at Japan, property prices have fallen by more than 70% over the last 25 years and they are still not building any more land.

Also remember that we are following the same austerity measures as Ireland so the same outcomes are likely here. Yes we have a broader based economy but austerity from central government will take more out of the economy than most economists predict. Most were far too optimistic about the end of the recovery. Many said we would have a V shaped recovery, A few said a U shaped recovery. I still think that we will have an L shaped recovery. With stagnation as a result of austerity.

As for it affecting industry, yes but a lot less than you would imagine. Many businesses do not look at investing unless it has a Internal Rate of Return of at least 10%. So could easily cope with 5% interest rates. Also if the cost of property fell substantially then the costs to expand would be lower anyway offsetting the higher interest rates.

Also since low rates only sustain asset bubbles they raise the cost of entry for new firms, and everyone acknowledges that small firms are where jobs are created. So no wonder job creation will be pathetic.


True but unless you can be a cash buyer it will not help you. You could also restrict mortgages to Building societies thereby removing the housing market from the effects of the wholesale money markets, making savings with a building society a much better prospect, since you will need it as a deposit.


Not necessarily. If the alternatives are higher property prices and fewer first time buyers, then it will mean a more unstable market.