If lenders are curtailed in what they can offer, competition will wither, house values will stagnate and the mood that pervaded the country buoyed by the knowledge that property was a good investment will evaporate.
People are encouraged to get good financial advice but then the industry that provides this is killed off leaving people to make major decisions without suitable advice.
When redundancy strikes and income falls, how can people be expected to pay their mortgages? Well, if accident, sickness and unemployment cover was compulsory, the spectre of repossession would disappear.
The rise in ASU sales would see more innovation from providers, brokers would sell the best solution, and if the cost of premiums were included in the affordability calculations, it would reduce overall borrowing capacity.
The job of government is not to remove all personal decision-making by controlling what we can aim for. Let people make their own decisions based on future employment prospects and property values. If they see property as a sound investment and feel happy investing in this area it must be good for the economy.
A thriving property sector encourages people to borrow and spend using good judgement in a stable economic climate. Protecting the reckless against over extending themselves by ensuring mortgages can still be paid even if employment ceases would surely solve the problem and allow clients to receive independent advice on their finances rather than from limited products sold by banks.
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