Sub-prime mortgages: risk of US contagion?

EdInvestor

Here's a fairly convincing article which says there's not much risk of the current problems in the US sub-prime mortgage market spreading over here.

Independent

Just wondered what the brokers think.
No doubt they have their fingers on the pulse.... .

Mr_helpful

Unfortunately the press in this country has a dis proportionate amount of power. Ie "The sun recommended it so I did what it said" and so people do follow what the press says though in reality most financial writings in the daily papers are tripe written by financially ignorant journalists just trying to grab a headline. Dont forget scaring the crap out of people with a sensationalist headline sells papers. Dont forget these so called experts are unregulated by the FSA. I am old enough to remember when the Financial pages of the Mail were saying a With Profits Pearl endowment was the best thing since sliced bread. The press has been telling us of the impending property crash for about 5 years now. No doubt when it comes they will claim to be the first ones to have warned us.
Some of the article I think is correct in that we have less to worry about from the size of the sub prime market. However lenders have been taking advantage of low interest rates and giving much higher income multiples. We have gone from 2.5X joint a few years ago to in some cases 5X joint income which may be ok on a bank base rate of 3.5% but now in a relatively short period of time rates have risen to 5.25% or 67% rise in a couple of years. Many people are beginning to struggle. Those with fixed rates may come in for a nasty shock when their rates end, especially if they are now down to one income as a result of say having children. I think the lenders are now being irresponsible and should start gently reigning back on lending otherwise we will have a sub prime problem in similar proportions to the USA