For the average first-time buyer on a £20,000 salary with no savings and no money available for a deposit from cash-strapped parents, buying their first home in this market is impossible.
The Turner review is likely to have some impact on LTVs, and restricting multiples will only hinder the property market further.
But there are other options. In the 1990s the idea of MIGs promised to give the protection lenders needed to enable them to lend over 75%. Will we see a return to MIGs?
In the 1990s MIGs failed due to the avalanche of claims received and a lack of understanding of how these policies work.
Things are different now – insurers have far more sophisticated underwriting techniques and clearly worded policies coupled with a much better understanding of risk transfer could make these policies very relevant now.
But as ever, the problem is cost. Back in the 1990s MIG premiums were around £700. With all other costs and fees mounting for first-time buyers, will this be another added cost they simply can’t afford?
A new take on MIGs is perhaps just one example of the options available to lenders that could help stop the rot.
We’re all agreed that something needs to be done to stimulate the bottom end of the market to get the property market moving and a creative approach to risk transfer could well be the key.