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I DON'T know when it [...].

I DON'T know when it happened, but I suddenly seem to be getting older. I find myself remembering events from the past in great detail but then I can't remember where I put my car keys only five minutes earlier.

And I have to check myself from going on about times gone by, like the price I paid for my first property or the crazily high interest rates Mr O and I had to pay for our home back in the 1980s.

Things were tough for us then. And it's tough for young buyers today. Prices are high (and getting higher) and saving for a mortgage is tough, especially with high rents which can leave little to spare for saving. And when they do finally have enough in the piggy bank, there are so many hoops to jump through, forms to fill in and information to supply that they must feel there couldn't be any more hurdles to climb over.

But another is creeping up over the horizon.

Mortgage lenders will soon refuse loans to potential borrowers unless they can prove that they will be able to afford their repayments when interest rates rise.

New guidelines from the Financial Conduct Authority mean that lenders must "stress test" home buyers to see if they would be able to pay higher monthly payments.

And that should be welcomed. We all remember tales of buyers being lent high sums with little chance of being able to meet payments. Fortunately, repossessions were not as high as had been expected when the property bubble burst a few years ago, but the repossessions that did happen were all too often the result of irresponsible lending.

We none of us know what the future holds, but we don't need a crystal ball to know that certain things will happen - such as interest rates rising.

And although this does seem like another obstacle to be overcome, it is vital that we learn from the mistakes of the past and do not set borrowers up to fail.

Enjoy your weekend.

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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Jan 18, 2014
Next Article:Smart semi has been renovated.

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