Home Loans is not DEAD

Mortgages that allow buyers to borrow 100% of the value of a property has been endorsed by a member of the Bank of England interest rate setting committee. 
Kate Barker, a government adviser on the housing market, said that loans that allow homeowners at risk of negative equity, should not be outlawed. 


Gordon Brown recently said the 100 per cent mortgages should be banned. 


But if Miss Barker said she did not want a completely unregulated market, she told The Spectator: "I am not personally convinced that I mean that we would absolutely never have 100 percent mortgages. 


"You can have rules on averages in the entire book, rather than saying" No, never. "Because personal circumstances vary. 


Miss Barker was also suggested banks-reacted to the collapse of the economy by making many willing to offer those who have small deposits. 


"The big down 75% to 80% [loan to value requirement] May be exaggerated. I would like the mortgage market to move. I expect property prices to move again. " 


But this week, the Council of Mortgage Lenders showed that 900,000 homes were plunged into the negative. A nearly 20% in house prices, they need more than their house is worth. Another 1.1 million saw their equity to less than 10% of the value of their home. 


Miss Barker also argued the mission given to the Bank for targeting and control of inflation has been flawed. 


He is accused of using interest rates to keep inflation at 2%. But the inflation of consumer prices rose 5.2% last year, even as the economy plunged. 


"In the early years of inflation targeting, it produced a stable economy. But I think it is now clear that it can not by itself, produce a stable economy. " (source)