Always loathe to be the pedant, but the property owner is actually the mortgagor not the mortgagee, as you have said in your article. The lender is the mortgagee.

As a lawyer, I am told I will still be able to get a mortgage as lenders view this as a secure profession. I have been looking for a property for over a year in London and am tempted just to make do with one just in case this changes and I struggle to get a 100 % in light of tougher market conditions. At the same time, I do not want to just have to "make do" when so much commitment is involved.

A lawyer, Lodon ,

Those criticising Andy of Bath need to brush up on their land law. A core principle in England and Wales is that no subject can own land. All of those boxes set upon a few square metres of land that you have been paying a fortune for actually belong to the Crown/Monarch. All you can have is one or more rights over the land. What you think of as 'ownership' and the charge possessed by the mortgage lender are therefore much closer than some writing here think. It is not particular far fetch to say that until you have paid off your mortgage, you own very little of value at all. The reason most non-lawyers don't notice this in practice is that any outstanding mortgage debt is paid off at the time a property is sold. You notice it a lot more if in negative equity your house is repossessed. Then, the mortgage lender takes control of the house, sells it for their own purposes and you still owe them any shortfall - hence the myth of handing back the keys and walking away!

Clive, Chichester, UK

I also agree that People earn less now than they did, maybe when they origonally took out their morgages.

BUT DO NOT FORGET MONEY MAKES THE WORLD GO AROUND. I wonder how many buisinesses run with thier own money? and how many would survive without an overdraft?

Bill Ewing, Dundee, UK

It seems strange that the FSA warns on loan to value issues with mortgages. WHat were they doing when Northern Rock was offering 120% mortgages?
Do they really think this is news or are they so cocooned in their ivory tower that they have lost all links with reality? It didn't take a rocket scientist to know that those offers by Northern Rock were demented yet what happend? Absolutely nothing.
We all pay for these people and have no way to sort out the mess under their roof.
Its all to sad to believe this mess is for real, but it is hapening and unless the FSA get their house in order first, and cut all these unnecessary rhetorical comments which are coming out after a whole herd of horses has bolted we will dig our selves into a deeper and deper mess.

Robert D Marshall, London, UK

Michael, truro:-

Your argument that this whole thing is casused by Oil is a unique one.

Its caused by banks relaxing lending critieria and lending more than people can afford - fuelled by the widely held belief that house prices only ever go North.

As soon as that sentiment changes, both in the US and here, the cracks start to appear.

The most obscene part of this whole sorry tale is how the financial services industry demand that the BOE / FED put the money printing machines on overdrive to replace the money that they have lost.

The US has had its Sub Prime. Anyone that things that our lenders have been more repsonsible need a reality check. Our Sub Prime has not even started.

Matthew, Birmingham,

No Andy, we can't ,as whoever is on the register as title holder is the owner. The banks just have a secured charge.

Gareth, London,

After careful consideration of --the points made in this article and all the economic facts collated by other financial journalists at this uncertain time,I believe for the last ten years people have lived an illusion fuelled by down loading their equity. We have to return to a realistic society in which our children can afford their own home rely upon their income not falling into spiral of debt and easy money . Time will prove this government are guilty of a huge confidence trick

Sarah, Membury, Devon

Let hope lenders dont listen to the FSA, and repossess and sell defaulters homes quickly, rather than delaying as values fall, ultimately leaving unfortunate ex-home owners in greater debt.

Yes, in a slumping market delayed repossessions hurt defaulting borrowers even more. Its counterintuitive, but true.

Pete Smith, Redhill, Surrey

Stuart in York:

"We need this crash to get back to reality - levels where incomes can buy a home, and again buy homes to live in as opposed to invest in."

Wise words, but of course as soon as we get back to the point of affordability where incomes can buy homes to live in, they become quite an attractive investment proposition again, and the whole thing starts over again...

The only way to change that would be structural changes to remove that investment attraction (e.g. remove the tax deductibility of mortgage interest for BTLs).

David, Amsterdam,

It is incredible that even The Times does appear to realise that the Land Registry's information relates only to England & Wales and does not apply to Scotland. Or have I missed something?

Jon, Dumfries, Scotland

Put simply,
The prices need to crash to x3 average salary,
House prices MUST be linked to real inflation to prevent boom bust.
Speculative investment in residential property must be prevented.
Priority housing, work and social/ health care for indigionous people must be fortified.(everyother country does it try getting into Canada or Aus without benefical skillsets. The US you can't, period! as they say!)

A roof over ones head is an absolute requirement to be a contibuting member of a society.
Immigrants for cheap labour is as a result of people not wanting to do lower paid jobs because those jobs can't buy security, thus increased social spending, benefits and lack of wanting to work.
Back to house prices.
I will run for Prime Minister with these core policies if people back me. However these simplistic views probably make me over qualified in comparision the current lot.

Rob, ex Notts UK, Vancouver BC

People are still buying 2 bed houses for £650k near where I live. Clearly not everyone is listening to the war drums.

sid, greenwich, uk

Folks, the housing market is...a market. Buyers and sellers transact a sale at price both agree to. Supply and demand may be a cliche' but that's the reality. House prices will only fall when buyers become unwilling or unable to meet the price demands of sellers, and not until then. Here's a novel thought to contemplate -- the widespread pathological "need" to buy a house is one of the primary reasons house prices continue to go upward.

Dan M., Huntingdon, Cambridgeshire

Dan,

I think Andy is at least in a matter of speaking correct. The Legal Title holder is it is true the property owner. on paper. The banks usually have power to foreclose if the mortgage is unpaid and to add on costs and to pursue a title holder for any difference in equity (negative) for up to 12 years afterwards.

I call that pretty much being a tenant in your own home if you want to call yourself the owner of course!

Austin Tassletine, Bristol, UK

The thing I notice about the three risk factors the FSA have pointed out is that they have ignored one of the biggest groups, the people who have interest only mortgages. As a conveyancer I see that about a quarter of mortgage offers coming in are interest only. Surely this is a bigger risk factor than someone paying their loan off over a longer time. Most people do not have a repayment vehicle, they are relying on property prices rising enough to cover the shortfall when they come to sell

A Maud, Portsmouth,

Andy, Bath -
Kindly check your facts. UK mortgage-borrowers are legally the owners of their homes in most cases. The fact you confuse legal ownership with borrowing levels indicates you fundamentally misunderstand the issue, and smacks of jealousy.

Dan, Aspley Guise,

In my part of Devon,the ave salary is well under £20,000pa.An ex local authority terrace house in our village is up for £210,000.This represents about 12-14x ave salary .This is clearly unsustainable, house prices not only need to come down, but this should be celebrated.
Patrick Devon

patrick, Axminster, Devon

Let's simplify this, credit is using tomorrow's earnings today. It is an unfortunate fact that tomorrow has come and the cupboard is now bare, unless of course governments are willing to print more money and pretend that it is real earned wealth.

mark cooper, southampton, uk

To the comment which says we should accept paying 60% of our salaries for a home and we if dont we are selfish... A typical house does not cost 200k+ to build. Its the price of land which is inflating, most of which is owned by an extremely small number of very rich people. Now where lies the selfishness?

A Harris, Kettering, UK

I agree with Andy. The only homeowner is the one with no mortgage. We have approx 800k home empty in this country so why is there a shortage.

I believe its the speculators forcing up prices to an extend where new buyers with normal incomes simply can not affort to buy a home.

We need this crash to get back to reality - levels where incomes can buy a home, and again buy homes to live in as opposed to invest in.

Stuart, York,

In the words (well letters) of a wiser man than I; C + I + G + X - M = GDP.

To sustain economic growth the sum of Consumption, Investment, Gvmnt Spending, Imports & Exports must be positive & increasing.

Over the last 10 years growth in this country has been underpinned by the availability of credit that has fuelled consumption, investment & government spending (boosted by resultant tax revenues).

The past availability of credit has circumnavigated 'real' affordability.
It's not, & never has been, economically affordable to purchase a property that is equal to 5 or 6 times annual salary yet this is now the norm, while equity withdrawal allowed access to this "value" fuelling GDP growth. Unsustainably!

Now C is down (no one has access to any money).
I is down (restricted credit hits investment)
G is down (no one left to squeeze)
X-M (best not start no the BofP).

To conclude the GCSE economics lesson - it'll take more than an interest rate cut. Mr.Brown pay attention.

James B, Leeds,

A Rolls Royce is a luxury. A home is not. Houses are hugely overpriced at the moment, there's no getting around it. And 50 - 60% of a salary should go on the mortgage? Not much room to manoeuvre if interest rates go up. Housing should not take more than 30 - 40% of one's salary, tops. It's nothing to do with selfishness, just that most people don't want to give up their entire lives to become slaves to a huge debt.

Jill, London,

Personally i think all this time we have been getting away with house prices which were just too low. A Rolls Royce used to cost the same as semi detached house in london.

At least now house prices are more in sync with other goods and products - it makes more sence.

The three x take home pay rule is crap. i can see mortgages becoming at least 50/60 % of a persons take home salary.

It's life. People who complain are just too selfish- just eat out a little bit less and have on less holiday.!

chetas patel, croydon, surrey

a good lesson for everybody. Don't buy what you cannot afford!

riccardo, brussels,

Can we please stop using the term "Homeowners" to describe people who have a mortgage? Until they have paid off this loan, they don't own the house, and if they struggle to do so they might never do! Reposessions up 300% YoY in California ... coming to the UK soon! Bravo Gordon and your "Economic Miracle"!

Andy, Bath,

The extent of the sub prime crisis will impact the British economy and the housing market is not shielded from this crisis. It is inevitable that banks will tighten credit norms, stop paying higher incentives to boost sales and will focus more on quality rather than quantity. Not good for the investors who have bet on an annual appreciation in house prices exceeding over 8%. In addition, an economic slowdown will have an impact on salary earnings which in turn, will slow the sales in the retail sector. The bottomline is the boom is over and now we hope the worst will not happen.

K R Kapadia, Singapore,

The bank of England and the government simply have got things wrong or not right or there would not be articles like this.
People buy houses because that is what we do in this society,it is not peoples fault that they borrow alot to buy a house, more affordable homes should be built,anybody involved in retail could have told the bank and government that interest rates need to come down this inflation is not caused by shopping,shopping stimulates the economy. This credit crunch is caused by subprime lending in USA inflation fuelled by oil. Why not reduce tax on petrol.We are being controlled by ditherers.

Michael, truro , uk

Between myself and my partner we have a joint income of £70'000 a year. Not a bad sum to be going on with to be honest. Using the old income multiple of three times the higher wage earner plus the other, we could borrow £170'000.
Have you seen the houses for £170'000?
Supply and demand is such a bogus argument that it's in danger of becoming a cliche`.
The truth is, i do not want what i CAN afford and i believe everyone else is beginning to feel the same way.

Stuart, Sheffield, UK

I agree,most people are actually earning less than before,losing career jobs and having to take a lower paid job but still having the huge debt borrowed when things were better,and low intrest rates will never cure the problem it started the whole donward spiral in the first place,all people were doing was living on cash from remortgages and cheap bank loans

patrick, solihull, uk

Last July,the RICS said house prices would rise by 40% over the next 5 years.It is obvious that they havn't got a clue what they were talking about.Didn't they consider the possibilty of the credit crunch and what effect it might have over here?If prices were to rise by 40%,what % of peoples take home pay was going to service the mortgage given that the inflation target is 2%.Their basic assumption that a shortage of supply and low unemployment is too simple.The word confidence is meaningless.People are always confident about spending money providing the banks will lend it to them in the first place.House prices have only risen in recent years because people have become poorer by borrowing,not because the country has become richer.Most people have never been so poor,hence,the slowdown this year.

stephen hulton, eure, france