The biggest pressure on household incomes is the cost of housing and the main pressures on that have been firstly the growth of households rapidly outgrowing the supply of housing so that the competition for houses has driven prices up and the opening up of the mortgage market to lenders other than the building societies.
When we bought our first house the Building Society was almost the only financial institution that lent on mortgages and they had a very conservative policy on multiples of income, to what extent they would take second incomes into account and generally limited the proportion of a family income that could be paid each month in mortgage payments.
But in the 1970s the mortgage market was opened up and banks and insurance companies came into the market, They had no kind of social conscience. All they wanted was a big share of a lucrative market when interest rates were high so they started taking all household incomes into account, lending larger percentages of earnings etc. this contributed to the rise in house prices.
We thus got stuck in a vicious circle, whereas when I had my first child I stopped work and while it straightened our circumstances, out mortgage was not an onerous burden, when a bank would lend 4 times 2 salaries, it is obvious that the mortgage payment is so high that a family cannot afford to lose the second salary and women have to stay in work.
Eloethan it is actually the other way round to your suggestion. Women had to stay in work due to the banks and other financial institutions being prepared to lend too much money to households to buy a home, contributing to the rise in house prices, which meant households needed to borrow more and more to buy increasingly expensive houses and as a result they could not afford to lose one income when children arrived because of the cost of servicing the mortgage.
Something else that can be blamed fairly and squarely on Mrs Thatcher's financial policies.
Good Morning Good Friday 29th March 2024
Things you find stressful that other people don't notice.
They don't really care do they