Prescott blames banks for housing boom

[Legal Beagles]

The former deputy prime minister has accused Britain's 'greedy' banks and building societies for fuelling the boom in house prices over the last 10 years

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[EXC]

Re: Prescott blames banks for housing boom

Shame he left it until he was out of office before he spoke out. Probably had his mouth full anyway.

[argentarius]

Re: Prescott blames banks for housing boom

Hm, good analysis, Prescott.

The banks were "greedy" when they were lending at minuscule margins. Now they are "greedy" when they are putting rates up to more realistic levels.

They were "greedy" when they were lending more people money - which they chose to borrow. And now they are "greedy" when they are stopping lending high multiples or high LTV percentages.

Is anyone noticing a theme here?

The main cause of the housing boom was increased demand compared to supply, not mortgage pricing or lender "greed".

[Amy]

Re: Prescott blames banks for housing boom

This from the man that wanted to concrete over the South East of England for new homes.

[argentarius]

Re: Prescott blames banks for housing boom

But maybe he actually had a point there. If you accept that most of the house price boom is caused by excess of demand over supply, then throwing up thousands of new homes might have been the only sensible means to restrict house price growth.

I'm not saying it's necessarily a good thing, for environmental or other reasons. But it should have helped first time buyers by restricting house price rises.