Importance of living within your means

Britain is a diverse little island and the cost of property in different areas of the country can vary wildly.


But the salary of an air traffic controller, for example, is around £50,000 no matter where they live so it’s all relative.

A blanket decision to offer the cheapest mortgages to those earning £50,000 or more could shut a number of home owners out of the property market when they pose little risk to lenders.

There is a significant difference between living within our means and living comfortably within our means, and that difference is our income to outgoings ratio.

For those who fall into the first category life can start to feel like walking a tightrope – teetering on the edge and desperately trying to maintain some balance.

For those lucky enough to be in the second camp, life is less complicated and an interest-only mortgage is often more appealing for the freedom it offers. It is less to do with income though and more to do with outgoings.

Brokers need to be certain that they are offering the right advice to the right people, as there is nothing worse than when a home owner cannot cope with their repayments.

The result of not living within our means can be catastrophic to individuals, families and the reputation of the industry.

Responsible lending is a good start. But most important is the need to treat clients as individuals, taking factors such as income, outgoings and geographical location into account before turning them down.