Friday, Feb 20, 2009
Name: Sir John Gieve. Subject: The Bleeding Obvious
Telegraph: Mortgage deals 'should be capped', says Sir John Gieve
"the large and co-ordinated cut in interest rates at the start of this decade almost certainly contributed to the build-up of an ever larger bubble."
Posted by cheekie charlie @ 08:57 AM (340 views) Add Comment
4 Comments
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1. It_is_going_with_a_bang said...
Go down like and lead balloon...
That is what market forces are doing now anyway and it's making Gordon very unhappy so can't that happening anytime soon.
2. Liddiard said...
Finally we hear someone willing to say we have to start sensible lending. I have been so confused of late reading about the apparent green shoots in the housing market etc, whilst also reading that in 2001 the UK borrowed 6 billion from overseas to finance mortgage lending but by 2007 we borrowed over 750 billion with building socs lending 180% over what they had coming in. EVERYTHING seemed to be saying to me HOUSE PRICES HAVE TO COME DOWN, they have to lose the 50% they put on a a few years (a rise that should have taken 40 years in line with income), and we have to go back to 3 1/2 times income and only up to 80% of 2 incomes. Do your sums , if the average wage is £25000 with the top 1/5th on £50000 and the bottom fifth under £15000, even on £50000 that is £175000 isn't it? Yes its hard for all the people who became victims of the bubble and someone of course should have said "we must cap the mortgage market" long before they have, but IT SURELY MUST BE SPOKEN ABOUT NOW OVER AND OVER AND OVER, rather than speaking about "green shoots" and "now is the best time to buy" when EVERYONE knows that house prices HAVE TO FALL. The sooner surely we all come to terms with that the sooner we can all get on with trying to sort out the mess and go back to how things were only a few short years ago, when a £250000 house was spoken of as being worth a quater of a million, and people used to think that if they won the Readers Digest £250000 competition they could retire. Life went mad but only for a decade or less, now we have to adjust to life going back to where it was before the madness and the VAST debts we incurred in the process. Let us hear less about the government putting pressure on the building societies to start lending and more about caps on mortgage lending that brings mortgages back to what we can afford and lending based on savings.
3. wdbeast said...
Sir John Gieve, your final score is nil.
You passed on 24................!
4. rm96696 said...
Finally someone talking some sense. People waffle on about regulation, but the only rule which would have averted the current crises is limiting ltv (at, say, 75% of the value of the house).