It’s difficult to see the return on investment taxpayers are getting for underwriting banks to the tune of billions of pounds. Cynics may say the main beneficiaries are fat cat bankers and their apparently inviolate severance arrangements.
Despite the inviting mortgage advertisements that adorn lenders’ shop windows the deals on offer are subject to caveats, so even those borrowers who are in a position to buy homes are being hampered.
Among the most damaging of these caveats is a result of lenders’ attempts to conform to what now constitutes responsible lending, one element of which is the insistence on deposits the size of St Paul’s Cathedral.
In the days before the economic meltdown, thousands of borrowers showed they were capable of repaying 95% LTV mortgages.
And while unemployment ravaging the land makes the present climate different, unless banks and the government show some faith in the public’s ability to repay their mortgages, hell will freeze over before the housing market recovers.
Scrapping Home Information Packs, refloating 95% LTV loans and suspending Stamp Duty are practical steps that would make a difference. It’s time rhetoric and hand wringing were accompanied by some ballsy action.