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More mortgage regulation now would be 'a disaster'
18 July 2008 10:30
Lenders are partly accountable for the current malaise in the housing market, according to one broker, but introducing greater regulation now would only make things worse.
Halifax's latest figures indicate that although house prices were down by 6.1 per cent year-on-year last month at an average of £180,344, they are still nearly 40 per cent higher than four years ago, reflecting the high level of price growth evident until last autumn.
Firstrung chief executive Paul Holmes believes that lenders are responsible for the way prices have rocketed and now fallen, with cheap credit having enabled borrowers to purchase homes they otherwise would not have been able to afford.
Yet he claimed bringing in regulation would merely protect house prices and would be of no use to first-time-buyers, adding that having allowed the market to 'run amok', it would be courting 'disaster' for the government to interfere now that it is in a state of flux.
Mr Holmes also asserted that the media had to take some of the blame as well, with television programmes and press reportage on the property market and how easy it was to make money through it engendering 'a sense of invulnerability' among buyers.
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