Sunday, February 22, 2009

Gordon Brown to ban 100% mortgages!

According to various papers, including the Sunday Telegraph, Gordon Brown is to ban 100% mortgages.

There are of course a number of observations you could make.

Firstly its too late in many ways. The horse has not so much as just bolted but to quote David Cameron, has in fact gone on to win the 3:30 at Utoxiter.

It gets worse though. Gordon Brown is saying he knows more about banking. Clearly he doesn't.

The banks have for now at least already stopped lending 100% loan to value mortgages.

The really big problem though is that Gordon has in one stroke ensured that first time buyers will for quite some time, be barred from the housing market. This is of course exactly the reverse of what needs to happen.

The real problem has not been 100% mortgages, it has been the multiplier applied to them and self certification of earnings, as in a complete lack of due diligence on behalf of the banks.

What is even more ironic is that Gordon Brown is talking about prudent lending. Presumably prudent borrowing also. This idiot borrowed well up to the so called golden rule 40% and so had to ditch it at the first sign of trouble.

We hear Labour ministers saying they have "paid off Tory debts". Well that is true, but also obscures the bigger truth. Before the 1991 recession the Conservative government had debts of 20% of GDP. After it it was over 40%. It is true that following Ken Clarke's future budgets Labour paid a bit of that off, but it started this recession with a massive budget deficit and debt rapidly approaching 40% (excluding Northern Rock and public sector pension liabilities).


CROWN said...

self cert and high multipliers were/are the problem. You know it, I know it, why oh why does the regulator and government not get it?

Anonymous said...


"Mr Brown said the Financial Services Authority would be considering controls on mortgages of more than 100% of a home's value"

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