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MP demands mortgage change to stimulate housing market

Gordon Banks MP wants to see the return of 90% mortgages as a way of stimulating the housing and housing -related economies.

MP demands mortgage change to stimulate housing market

Banks, the founder of Cartmore Building Supply and since 2005 Labour MP for Ochil and South Perthshire, was talking at the BMF North West Conference in Kendal earlier this month.

“People who buy new houses buy fixtures and fittings, new furniture, new carpets. In 2007 there was £2.4bn of high street spending among first time buyers alone,” he said.

Stimulating the housing market is all about finance, Banks said. “Northern Rock is refusing up to 50% of mortgage applicants – even those with perfect credit records. We need to force the banks to lend again – I want to see banks competing among themselves to see who can provide the best mortgage deals.”

Most mortgage products demand deposits of 20-35%. “Why? Because lenders want to be sure we can afford repayments? I don’t think so – they are protecting their own backs against further falls in house values.” There must be a return to 90% mortgages, he said.

“In 2008 there were 1,200 10% deals available in UK, now it’s only 150 – and most of them carry penalty rates and significant fees. It’s just a clever way not to sell the product.”

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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