Alistair Darling's new mortgage Review - the good news and the bad news
Posted on 9 April 2008 by
Alistair Darling was interviewed on the Today programme this morning and announced that he was appointing Sir James Crosby, ex HBOS chief executive, to chair a Review examining how to boost confidence in the rapidly shrinking mortgage market. He said "Mr Crosby will talk with the Bank of England and the FSA to see if we can get more money into the system."
The good news:
The Chancellor said “we want to move quite quickly. I do think it is important that we take measures to help people get through what is undoubtedly a difficult period."
The bad news:
"I have asked him to report back this summer."
So although Mr Darling recognises the urgency of the problem he thinks a report in the summer, which no doubt means the end of summer, i.e. September, is good enough.
Having been Chief Executive of Britain’s biggest mortgage lender Mr Crosby could probably write a very detailed report in 24 hours in his sleep but getting input from others is clearly important. Many of the people Mr Crosby will want to speak to will have busy diaries but because the current funding situation is so dire, providing they believe this review might produce some tangible benefits most will make themselves available at short notice.
Reviews ordered by this Government, and then reviews of the Review, seem to just be a way of Gordon Brown deferring actually having to make a decision. For example he commissioned the Miles Review on long term fixed rates 5 years ago and what happened in this year’s budget? Oh, another review of long term fixed rates was announced. The only progress made so far is that a long term fixed rate has now at least been defined – it relates to any fixed rate for 10 years or more.
If the market, or The Bank of England, doesn’t soon come up with a solution for at least mitigating the effects of the current funding impasse, then by the time Alistair Darling has got round to reviewing and implementing whatever recommendations are made in Mr Crosby’s Review, today’s funding problems will look like a golden era!
Categories: Property market, Bank of England, Mortgages
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