Were UK mortgage lenders at fault for the credit crunch?

Despite the fact that the credit crunch began in the US, and appears wholly to have occurred as a consequence of high-risk US mortgage lending, there is no doubt that the UK mortgage industry played more than a passing role in the collapse of the UK property sector. While the FSA (Financial Services Authority) is being accused of "throwing out the baby with the bathwater" there is no doubt that element such as buy to let mortgages and self certified mortgages played a major role in the collapse of the UK property sector.

However, the truth is that nobody twisted the arms of UK property buyers to take on mortgage funding which turned out to be above and beyond their financial means. Nobody forced property buyers to sign on the dotted line to confirm they had sufficient funding in place to cover their self certified mortgages. While there is no doubt that some mortgage companies were more aggressive than others in pursuing clients, the bottom line is that customers themselves should have been well aware of their own financial situations and taken into account a potential economic downturn in the UK.

Very often we are too quick to blame the financial industry but ultimately customers who snapped up competitive offers in the mortgage industry must shoulder some share of the blame.