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.