This week brings us the bright idea of "Mates Mortgages" courtesy of the UK housing Minister Grant Shapps. Whilst I personally tend to stay away from political comment on any subject – this really does take the cookie as "Bonkers Suggestion of the Year" so far to fix the housing market.
Mr Shapps, despite being the UK Housing Minister seems to have overlooked the fact that "Mates Mortgages" already exist. True, only one lender offers them (Britannia) and unsurprisingly only around 1000 of these mortgages have actually been taken up.
Perhaps it's just me, but if only one lender can only flog 1000 mortgages across the whole of the UK, this would suggest that
- The mortgage product itself is very pricey.
- Very few people actually qualify for it.
- No one wants it because it just doesn’t work.
- The mortgage itself is so complicated to set up no-one can be bothered with the hassle.
Mr Shapps has once again bought an idea to the table without really giving it much thought at all. Earlier this year he suggested that the property buying public "change their perceptions about property ownership". No confirmation (then or now) as to what one should change their perceptions to, or how anyone should go about it – just change.
In fairness to Mr Shapps, we all have the odd "Archimedes" idea whilst sitting in the bath – only us non-political types seem to have the amazing ability to reflect later on the fact that we are not quite the genius we thought we were 10 minutes earlier with a soap bubble beard and practising our karaoke skills.
The UK housing market needs less "bathtub thinking" and more ideas that could actually work if they were implemented – rather than ideas that have been proven to be unsuccessful and non-starters. The property market needs less debt – do something about that (like regulate against excessive LTV's) and we just might begin to see a recovery.