Leader: Talk to the right people

Well everyone it seems other than the Association of Mortgage Intermediaries – for some reason Shapps snubbed brokers.

This was especially ironic in a week when the Council of Mortgage Lenders released figures showing that 66% of all first-time buyer mortgages were distributed via intermediaries.

With many in the market now charging for the advice they provide, borrowers clearly value the service that brokers offer. Day in day out intermediaries are at the market coalface and are the best people to ask when talking about why first-time buyers are unable to get on the housing ladder.

Yet for some reason the government seems to think they have nothing to add on how to get the market going again.

That said there seems to be little evidence of anything concrete achieved at the summit other than recognition that it’s a hard nut to crack – quelle surprise.

There are two central problems at the moment – the amount of money that lenders have to put by for high LTV loans is onerous and house prices remain way too high. When wages are suppressed and living costs rising it is hard to save a deposit.

One option could be to copy something being offered in Italy whereby if lenders have a mortgage indemnity guarantee in place the amount of capital they have to put aside for high LTV loans is reduced. But the market for this type of cover is limited – insurers view the product as having a bad reputation.

Government help in getting the MIG market going could be a good start. Better that than the other option – watching house prices collapse so as to be finally affordable for first-time buyers.