you can debate this like the chicken and the egg scenario, but basically it comes down to this,
in the UK, pre the80s;
to get a mortgage from a bank or building society you needed to pass certain criteria, these were,
1) be in full time employment
2) have a deposit, usually minimum of 10%
3) have a good credit history, sometimes a guarantour
having passed these requirements you were then offered a mortgage of...
90%
the problem came AFTER the banks and financial institutes had lobbied,for many years, for the relaxation of regulations which were set in place after the great depression.
it was around the thatcher era this happened, the proof is their, but im no school teacher, so go find it yourself. I DID.
yes there is plenty of blame to go round, but the facts present a different picture, before thatcher people were happy to go with the old system, what changed? conservative policies, which sold off cheap affordable housing, while thatcher pushed the values of home ownership, while restricting councils from replacing those homes sold, at silly prices, ending the low cost/affordable homes sector .
banks were now able to offer 100 % mortgages, it was not surprising this figure would grow, greed and stupidity go hand in hand, and this is why we find ourselves in this situation today, yes people were niave and a bit silly/greedy, but who led them? who encouraged them? who gave them the money? once you start to roll a marble downhill it becomes difficult to stop.
