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| ::100% mortgages should not be ruled says MPC member - 20th April 2009 |
| Kate Barker, a member of the Bank of England’s Monetary Policy Committee (MPC) and a Government adviser on the UK housing market, believes 100% home loans should not be banished. These types of mortgages were extremely popular during the property boom but the credit crunch led to most banks and building societies withdrawing these types of home loans. However, these types of loans have been heavily criticised, primarily because they contributed to the housing market downturn, sending hundreds of thousands of people into negative equity. The Council of Mortgage Lenders reported last week that approximately 900,000 UK homeowners currently have some degree of negative equity. Back in February, Prime Minister Gordon Brown and Chancellor Alistair Darling called for a ban on 100% mortgages and the PM wrote to the Financial Services Authority requesting an urgent investigation into how these mortgages can be banned permanently. Furthermore, the PM has been trying to convince banks to turn down loans for individuals unless they can show evidence that they are earning enough to be able to make repayments. However, in the defence of these types of mortgages, Miss Barker told The Spectator: “I’m not personally convinced I want to say we’d absolutely never have 100% mortgages.” Miss Barker added: “You might want to have rules about the averages across the book, rather than saying “No. Never”. Because personal circumstances vary.“ Despite affordability improving for many first-time buyers as house prices continue to fall, the fact remains that without a hefty deposit, many are still unable to get a foot on the property ladder. |
| Source of this article : |
| 20th April 2009 |
| Date of this item added : |
| 2009-04-20 |