• The post you are reporting:
   
  Ross - on the continent there is also a much lower level of home ownership than over here. It is a very different market and their economies would benefit from a more flexible lending approach, though without some of the madness we have seen on the fringes.
  
  There is another argument in favour of 100% mortgage that arose in 1990 when we had a (lesser) housing crash. Millions were trapped in negative equity and with the economic downturn many people needed to trade down to reduce their debt. 'Let to Buys' combined with 100% loans became a popular option.
  
  The latest estimate I have seen is that with an expected contraction in the economy we will get 4 million unemployed by 2011. Indeed if as some say we get a 10% economic contraction this will reach 5 million unemployed. Many people hit by negative equity will need to move home for jobs. By banning 100% loans you risk damaging the labour market and an even bigger economic contraction with a longer period to recover.
  
  Once again it seems that Gordon Brown in his desperation to be seen to do something, anything, is going down the wrong road.

Report Post

Your Name

Reason