Millions of homeowners ‘may need second job’ if interest rates rise, BoE warns

Well folks, we’re fast approaching 2014 and the Tory government is going full steam ahead with their plans to impoverish a generation or two. When interest rates rise and they will, we will see hundreds of thousands, if not millions slip into negative equity and permanent debt. This reduction in available funds will have a detrimental effect on the real economy, with less funds to spend we will likely see a deflationary episode/crash which will cause further issues (negative feedback loop) in the housing market. Do not forget, this is all by design and it’s going to plan. Viva la revoluçion. Courtesy of The Telegraph:

Millions of homeowners will be forced to rein in their spending or take a second job when interest rates rise to cope with higher mortgage repayments, the Bank of England has warned.

Almost a third of the 11m households who currently have a mortgage will have to cut back or work longer hours if interest rates climb to 3pc from their current low of 0.5pc – even if annual pre-tax incomes grow 5pc.

Under the most extreme scenario, where wages are frozen and rates hiked by 2.5 percentage points, the Bank said half of mortgage holders, which account for a quarter of the £1.2 trillion stock of loans, would have to slash spending.
One in six households would be pushed to the edge of affordability, the Bank added, with the proportion of “vulnerable” borrowers with repayments above 35pc of gross income doubling to 16pc.

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