View more on these topics

Give lenders a chance

It’s not often we feel sorry for lenders but spare a thought for Nationwide and Halifax. They found themselves stuck between a rock and a hard place over collars last week.

The Financial Services Authority argues that if collar limits aren’t included in Key Facts Illustrations, regardless of being included in lenders’ terms and conditions, they can’t be enforced. But do we really want lenders making losses on existing business?

Cheap money allowed us to enjoy a decade of excess but now the party is over and the government is doling out tax breaks and political platitudes as Alka Seltzer-like cures for our aching financial hangovers.

Lenders have been encouraged to alleviate the financial plight of the UK’s borrowers and we welcome the two-year deferment of mortgage interest payments for those who find themselves unemployed, providing it doesn’t turn those who qualify for the scheme into work-shy scroungers. This should go some way to saving lenders money. On the assumption borrowers can return to work and property prices stabilise and then rise over the next 24 months, this will be cheaper and better than commencing repossession proceedings for all concerned.

But one reason we’re in the mess we are today is our tendency to believe that we can get something for nothing. Sadly, there is always a price to pay.

Cheap deals can’t be conjured out of thin air with just the wave of a magic wand. Lenders need time to shore up their balance sheets. Kicking them to the floor and further reducing the slim margins they make on existing business is short-term political point-scoring and will get us nowhere fast.

Recommended

Charlbury Group expands nationwide field force

Arrears management expert The Charlbury Group is expanding its nationwide team of field agents as market conditions help to bolster business. The group operates a nationwide field force which conducts a variety of tasks for firms across the mortgage market. It says current market conditions are resulting in the need for greater information on properties […]

Councils may set up own banks

Councils are considering setting up their own local banks to bridge the funding gap caused by the credit crunch.

Pink adds more protection courses for ARs

Pink Home Loans is hosting two more protection courses in response to overwhelming demand for the sessions from its appointed representatives.

Eight lenders to pass on full rate cut

Eight of the UK’s largest lenders are passing on last week’s Bank of England base rate cut of 1% to existing customers on tracker mortgage deals.

Canada Life annual IHT survey results

75% of wealthy unaware of new residence nil rate band IHT allowance Just 4% were aware the new allowance will be up to £175,000 per individual Lack of awareness of IHT rules means families risk paying a bigger bill than they need 83% think the current inheritance tax rules are far too complex A remarkable […]

Newsletter

News and expert analysis straight to your inbox

Sign up