Government must intervene on irresponsible lending - Cable

12.41.04pm GMT Mon 29th Jan 2007

Commenting on a Yorkshire Bank survey showing that six out of ten first time buyers would take a mortgage of over five times their salary, Liberal Democrat Shadow Chancellor, Vince Cable MP said:

"These findings are extremely alarming. But we should not blame the borrowers - they have little choice because of the highly inflated price of property. A great deal of irresponsible lending is fuelling this problem on debt.

"Most responsible lenders would baulk at loaning more than three times a person's income. At five times there is a greatly increased chance of arrears and repossessions.

"One of the fundamental problems at present is there are no safety nets. In the face of redundancy, mortgage borrowers do not have access to benefits for at least nine months.

"Meanwhile the mortgage protection insurance market is subject to massive rip offs, and this discourages users.

"It is time the Government woke up to the rising tide of repossessions caused by irresponsible mortgage lending, and talked to the industry about introducing best practice to protect young families buying homes."

Applicability: this item refers to England and Wales. Due to devolution, detailed policy may be different in other areas of the UK.