I was interested to read a report by RBS Economist Richard Barwell calling upon the Government to set up a body which would buy the homes of people struggling with their mortgages and which would allow them to stay on as rent paying tenants. I think this is possibly a very good suggestion which could stabilise the housing market, protect people from eviction and, perhaps in some cases, the process will release some equity tied up in the property enabling the selling individual to become debt free and perhaps more likely to start spending in the economy. If this could be a Government backed company working closely with lenders who may have to take a haircut on their lending I think this would have a very positive impact on the whole economy.
I am still noticing a big increase in the number of investors moving into the property market, both institutional and individuals, and I do still have a concern about an overheating rental market. I think this proposal may also have a positive impact in relation to that. I will let you know should I hear anything further.
Lindsay Darroch Partner & Head of Property