Are new ways needed to raise capital to buy a home in the UK?

Someone on here once invited ideas of new ways to raise capital with house prices so high. One of my own thoughts was that the government itself could become a mortgage lender at low interest rates. This time next week, Northern Rock, Britain's 4th biggest mortgage lender, will be state owned, and still in business. The idea of the state lending mortgages doesn't seem so daft now, does it?

Mortgage lending is part of the reason why property prices are so high. If no one at all could get a mortgage, the price of an end terrace in Wigan would not be 拢100,000. This is an unrealistic price in a town like this, where incomes are struggling to keep pace.

With credit crunch in the UK markets taking toll on every lender and borrower, it is surely not a fanciful idea for the Government to come up with mortgage lending as a means to assure roof over millions of people.

I only wish Northern Rock would change it all and create new avenues for the home aspirers in the UK.

It is not going to happen.

Northern Rock has been nationalised to stabalise it, trim it down, and get it ready for sale. It would have been sold to private investors already, but it was (unsuprisingly) not easy to get a good price.

In any case - the government doens't have unlimited to resources to subsidise everyones mortgage! This is essentially what you are suggesting. Who would go with a normal bank if you could get a below market rate mortgage with NR? It wouldn't be allowed anyway - this is not a fair way to conduct business, and doesn't allow any competition in the market! A government would not last long by annoying that many people in both business and the general public who do pay their mortgages already.

The problem with the property market is not mortgage prices, it is property prices.

---

No mortgage prices are not making property prices high! I am sorry but thats not right. There are a number of reasons, largely due to supply and demand, and inflation, and even buy-to-lets, but not (in any signficnant way) mortgage prices. If you assertion was correct then prices would be depressed by the unaffordability of borrowing!

It is not a god given right to own a house, in most countries in Europe the portion of people who are homeowners is much much lower in the UK - as people are happy to rent and aren't as obsesed about ownership as we are.

Similarly, there is no god given right to borrow money. Mortgage rates are set by banks, based on cost and risks. If you can't raise 拢100,000 to buy said Wigan house - you can't complain that the person who can raise it isn't giving you that money cheap enough! Banks have many thinks wrong with them, but there are fundamental free market principals here - which mean there is a relatively set price for borrowing money.

As soon as you brought in state backed lending, it would mean nobody would use the banks. This woud have devestating impacts!

i think
http://www.amortgage4you.co.uk/ can help you.

It will be necessary to go back to the old way of buying a house. Save as much as possible instead of spending it all on clothes, computer games, alcohol etc and then get a mortgage in keeping with your ability to pay. I did this and was able to keep up the payments even when rates went up. When they went down I continued to pay the higher amount each month and was able to turn a 25 year mortgage into a 12 year one.