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Easy answers to complicated questions

This must be the season for sound bites about mortgages.

If it was possible to be more out of touch than Labour, the Liberal Democrats added their irrelevant voice to the debate by announcing that if it was up to them they would introduce a five-year, no-frills fixed rate mortgage with a maximum LTV of 85% in an attempt to bring stability to the housing market.

First, they are about two years late and second, five-year fixes won’t bring back liquidity. I’m not even sure what a frill is. Could it be the ability to overpay or repay an element early, or maybe allowing a mortgage to be transferred to another property, in which case yes – let’s dump these frivolous add-ons.

Referring to the product as more of an Aldi mortgage than a Waitrose one the Lib Dems announced that SafeStart deals would address all the issues surrounding the dearth of mortgage funding, but I’m not sure how.

What everyone in Westminster has missed is that lenders need stability to take on risk, while borrowers need reassurance that they won’t dive into negative equity the moment they step on the housing ladder.

Both these things could be achieved with a government-backed mortgage indemnity guarantee policy that provides an element of insurance.

Lenders would have the protection they need to cover defaulting clients, who would be secure in the knowledge that they won’t lose money on their homes.

Although the broker sector has been calling for this for some time, there is a stubborn refusal to embrace the idea.

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