As you read this, it is likely that Alistair Darling’s dulcet tones will be in the background, delivering this year’s eagerly anticipated Pre-Budget Report.
While the Great Clunking Fist is no longer the person at the despatch box, the influence of our Prime Minister will likely run through each line of the statement, with an expected range of measures aimed at getting lenders to lend again.
Having helped to solve the financial problems of the world, Mr Brown is back in Blighty and tasked with addressing ways to get lenders back in action. While the unprecedented bailout in October succeeded in stabilising British banks, it has not been enough to push them into lending again, nor have successive slashes of Bank base rate.
As the Council of Mortgage Lenders confirmed last week, gross mortgage lending in October totalled only £18.7bn, a massive 44% down on October last year. Nobody expects those days to return soon, but it is open to reasonable doubt how sustainable such low levels of lending can be.
Whatever Brown and Darling have up their sleeves, it needs to deliver the long-awaited kickstart to the mortgage market that thus far has been conspicuous by its absence.
Elsewhere, repossessions are back on the news agenda, which is never a good sign. From Northern Rock getting a kicking at Parliament, to Standard & Poor’s forecasting of the implosion of the buy-to-let market on a sea of missed payments, the other dreaded R-word has been everywhere.
Lenders can rarely have been under such public scrutiny about the way they handle struggling borrowers, and it is in their interest, both financially and politically, to keep repossession as a last resort.
Merely paying lip service to such a pledge is not good enough. n
