Marx and Mortgages

It’s all very well for a great hue and cry to be made on behalf of little businesses. But what of the great mortgage famine which continues to blight Britain’s housing market?

Various campaigns have been launched to ensure banks start lending to small companies – that late payments should be made illegal – and that red tape should be slashed.

That’s all well and good. And given that Britain’s small businesses are where the real risk takers can be found – and that such entrepreneurial operations represent the lifeblood of the nation – only the most churlish would disagree.

After all, it is from small acorns that mighty oaks can spring.

But the government must not lose sight of the fact that first time buyers are still finding it impossible to get on the housing ladder and millions who already have mortgages are facing crippling hikes in interest rates as their existing deals come to a close.

The government has to tell – correction, it must instruct – bankers, building societies, the entire panoply of lenders to launch a diversity of manageable deals at sensible rates of interest and which do not require thumping deposits which many people cannot stump up.

This is not a cry for a return to the bad old days – nobody wants a re-run of the sub-prime debacle – but it is a plea for the application of common sense on the part of the lenders.

It should not be beyond the wit of bankers and lenders ( though having seen the mess they’ve made of things perhaps that it is ingenuous) for them to be capable of sorting the wheat from the chaff, to decide who is a good risk and who is more speculative

That, surely, is the art of lending? It certainly used to be. It’s what building societies did in the past and were rather good at. But such discernment was abandoned when they got their noses stuck in the trough, when greed elbowed out discretion and judgement.

The newspapers lately have been filled with pieces about Karl Marx. Several of them – including The Times – have been asking whether recent events prove that he was right.

Bankers and mortgage providers must fall into line. They must remember that Britain is not just a nation of shopkeepers but it is also an island of homeowners.

If they remain recalcitrant, ungrateful that the taxpayer has bailed them out and footed the bill for their own folly, then perhaps Alistair Darling will be forced to add a dash of Marxism to his grand plan to save Britain from disappearing down a financial black hole.