In light of FCA report, are we victims or eejits?

Gavin-Walker-Blog (1)Ten years ago the present Mrs Walker and I moved into a new home. We didn’t overstretch ourselves mortgagewise, but as newly self-employed people we took full advantage of the offer of an interest-only mortgage from our friendly mortgage advisor.

So, along with the relatively small mortgage, incredibly we also received a cheque book allowing us to write cheques which, we were told, we could use to enjoy the equity we had left! ‘Take a holiday or buy yourselves a new car’, he suggested.

Thankfully we didn’t do either and we’re in line to take care of the capital when the day of reckoning comes.

However, according to the recent FCA report, around a million other interest-only mortgagees haven’t been quite so prudent and trouble lies ahead when the bank comes calling for the cash.

So, victims or eejits? The FCA report is a snapshot of the problems many in our society have on their shoulders thanks to the over generosity of banks in the good times. Yes, lenders are at fault for having been so imprudent, but the blame has to be shared around. Nobody ever needed a £25,000 kitchen – but many of us have one. And nobody ever needed exotic holidays to be ‘paid for later’.

So while we’re all quick to give the banks a bit of a kicking when the opportunity arises, we also need to accept some of the blame ourselves. And as we drag ourselves kicking and screaming out of the recession, let’s learn the lessons of the past, learn from the FCA report and resolve not to repeat the errors when our homes increase in value (as they inevitably will) and the good times come round again.

 

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Tuesday, 13 November 2018
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