Tuesday, October 12, 2010
Beastly bankers aren’t lending 125% mortgages, boo hoo
Britain is in danger of creating a whole generation of people who will never be able to buy their own homes. This is the conclusion of Professor Steve Wilcox, chair of the Centre for Housing Policy at the University of York, in collaboration with insurance company Genworth Financial. The number of mortgages worth 90% of a property's value has fallen from 245,000 in 2006 to 28,000 in 2009 - a decrease of 89%. Wilcox suggests several solutions, including the return of mortgage indemnity guarantees, paid for by the buyer, which protects the lender should the buyer default. But a major lender recently told me it was not confident insurers had sufficient financial strength, post credit crunch, to pay out claims on MIG if many people are made redundant and default on their mortgages.