The housing markets both here in the UK and in the US are going through a very rough patch at the moment.
A friend of mine is currently owing very little on her mortgage and was interested in re-mortaging to realise some of the capital and invest it in some improvements to the property. She had been looking at around £25k over around 15 or 16 years. She contacted a broker and was quoted in excess of £300 per month for this amount/term. I asked her what the interest rate was that she had been quoted, as this seemed to me like an excessive figure, and she said that she had been told this was around an 11% interest rate !!!
This seemed astronomical so I checked a reputable UK mortgage rate comparison site and its clear that there are still fixed rate mortgage deals available at between 4.7% and 5.7% and capped rate UK mortgages available at around 5.9%. I was quite astounded that she had been given a quote of around 11% from a broker and suggested she use a mortgage comparison site like this to be sure she was getting the best quote.
At that point I was on my high horse about how irresponsible some mortgage companies are and about profiteering etc etc until she told me that possibly the reason for the 11% quote was that the property was covered by a "Defect Act" due it being Miton construction. ( This may not be the correct spelling). Miton houses were constructed as I understand it using a poured pre-reinforced concrete method and defects were found in one part of the country with houses built this way. As a result all of them where covered by a "Defect Act". (In practice this has turned out to be very unfair because very few of these houses have since shown any actual defects.)
The point of all this is to show that at a time when the Housing market is very troubled I simply jumped to conclusions that the quote that she was given represented all that was wrong with the Housing Market. In reality the brokers quote was simply taking account of the fact that the house was classified under a "Defect Act". So much for jumping to conclusions.