Would stricter lending criteria help stave off repossessions?
At the moment the number of people whose mortgage is in arrears is rising steeply. But mortgage experts at the Council of Mortgage Lenders claim this is largely due to rising unemployment, rather than lax lending policies in the past. A spokesman for the CML says: “The real problem is the disruption to income that occurs as the result of redundancy.” He also points out that in the credit boom when banks were the most generous with regards to lending multiples, arrears and repossessions stood at a record low. Q: Surely with interest rates so low, I can afford to borrow more? A: This is one of the strongest arguments against banks being forced to restrict mortgage lending. In the current environment, with interest rates at a record low, many families can afford to borrow more than they did in the early 1990s, when interest rates ran into double-digit. At present interest payments on mortgages account for an 13.3pc the average person’s income. In contrast in 1990, lenders were far more re
