I've Seen This Movie Before, and It Does Not End Well

We Have Learned Nothing

We are repeating not particularly old, but remarkably destructive, patterns.

It appears that low and no money down mortgages are surging again:

What does the chart show?

It illustrates the growing proportion of UK mortgage lending at loan to value (LTV) ratios of 90 per cent or higher. Figures from the Bank of England last week found this type of lending had reached its highest level as a share of the total since the financial crisis, topping 18.7 per cent of all lending in the first three months of 2019.

The data appeared in a July report published by the BoE’s Financial Policy Committee, which monitors potential risks to the financial system. It is based on product sales data from the Financial Conduct Authority and the central bank’s own calculations.

Admittedly, this is the UK, which is a smaller real estate market, and is facing unique challenges **cough** Brexit **cough** at this time, so it may be an outlier, but this has unsettling echoes to the 2008 meltdown.