Risks to British housing market

The British Treasury warned of significant risks to the British housing market in a report yesterday.

The interim Miles Review of the British Mortgage Market said borrowers attached too much weight to the level of initial monthly repayments when taking out a mortgage.

It also found borrowers had a poor understanding of the risks involved in taking out variable mortgages and did not fully appreciate the risk of interest rate shocks or the protection provided by fixed rate borrowings.