It seems to have occurred to someone in Whitehall that at least some of the banking crisis was caused by financial institutions lending money to people who couldn’t afford to pay it back. After deep and careful analysis of the underlying causes, they’ve concluded that this was because the banks took their clients’ word that they had a solid income, and so were good for a mortgage of anything up to five times that amount.
This, clearly, was a bad idea. It turns out that some people may have been economical with the truth of their earnings. Others may have had the ability to pay until their overpaid contract ran out and they went back to normal earning levels again. The banks themselves don’t seem to have done any due diligence on any of this. So all in all, it’s a bit of a mess. Something must be done.
Tell you what. We’ll top self-certified mortgages completely. Brilliant.
Except for the minor detail that anyone who doesn’t earn a straight salary – like the 1.4 million freelance workers, or the 5 million other self employed people – can no longer get a mortgage. Well you can if you’ve got three years full accounts to hand and can demonstrate a steady earnings profile.
Ah, but, hold on a minute. There’s an awful lot of people out of work right now, with big gaps in their earnings history. Don’t know if you ‘ve noticed, Mr Brown, but there’s a bit of a recession on. So even if they get back to work, they still can’t have a mortgage. Nor can anyone who has set up their own business in the last three years – and by your own figures, that’s quite a few people who have lost previous well paid jobs.
So in summary, you want people to go into business to provide the flexible workforce but, not content with taxing us to death under schemes that nobody understands, you’re now going to cut off our ability to change homes to be near our work. Brilliant.
Seriously, you ‘d almost think they had something against the self-employed. Or they’re totally incompetent. I wonder which it is…