There is one certainty for every Budget day: that the chancellor will dream up some novel scheme to prop up the housing market. Rishi Sunak’s idea of providing state guarantees for 95 per cent mortgages taken out by first time buyers isn’t, however, that new. It is really just a reheated version of one branch of the Help to Buy scheme run by George Osborne between 2013 and 2016.
This is the story of the property market over the past quarter century: in the long property boom of the late 1990s and early 2000s banks got themselves into huge trouble by advancing high loan-to-value mortgages. They did so in two ways: directly through loans to their customers – such as Northern Rock’s reckless 120 per cent mortgages – and indirectly through investing in junk securities which wrapped together sub-prime mortgage lending in America.
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