If we had any doubts remaining regarding the severity of economic conditions they have been blown away by the latest lending figures and the Spending Review.
We’ve seen the worst lending figures in a decade announced for September, so the question is where is the optimism and hope coming from?
The Council of Mortgage Lenders has chosen to highlight the need for home owners to sell their way out of trouble, rather than sit tight and increase arrears.
All well and good if they can sell at a fair price and afford to live somewhere else.
Of course, this is sensible action in the right circumstances, but is this the central debate at this time?
The market is in a poor condition and properties are not selling, except in certain pockets. So how is this a headline suggestion at this time?
All focus should be on the critical issue of stimulating the housing market and creating a new wave of optimism. Lenders are understandably afraid to lend. Valuers are running scared and in many cases out of business.
People who have had the courage to set up their own businesses are going bust at an alarming rate. Those hanging on by their fingertips are not getting any support, only political hot air.
The one ray of light is MPC member Adam Posen who voted for an increase in quantitative easing. He is thinking of how to move forward
We hear of initiatives from the government to provide £2,000 to those willing to start a business, but is this enough to make a difference?
As far as our own industry is concerned we need to ensure the debate is focussed on the issues that will make a difference. The Financial Services Authority’s proposals are critical. I understand the point made by Charles Haresnape in his recent letter entitled ’Restore consumer faith by cleaning up industry’ (Mortgage Strategy October 11) as it is important to take a positive view to the proposed changes and get on with it.
But more important is the need to ensure the proposals make sense in the first place. We need to see sellers putting their houses on the market and regaining some optimism that they will sell their house at a fair price in a reasonable time.
We need to see valuers putting sensible values on properties and also feeling optimistic about sales.
We need lenders to work with the FSA and interested parties to provide products that will get first-time buyers back into the market. We are not going to see this if customers have to provide 10% deposits or more.
We need the CML and others to continue their excellent work lobbying for the right outcome to the proposals and we do not need them distracted by other less pressing, although valid, issues.
One ray of light is the solitary member of the Monetary Policy Committee Adam Posen who voted for an increase in the level of quantitative easing – at least he is thinking about how to move the issues forward.
Mark Robson Consulting