Which would work with UK mortgage lenders, the stick or the carrot?
With news that the FSA is looking into possible fines for mortgage lenders with unhelpful attitudes towards home repossessions, there is a debate as to whether the stick or the carrot is the right way ahead. While some may argue the carrot was the taxpayer funded rescue package, the fact is that the UK property market is still very weak and many mortgage companies cannot afford to carry excess baggage in these troubled times.
However, there is an argument that the stick in the form of financial penalties and possible restrictions of trade in the future may well focus the minds of many of the U.K.'s leading mortgage companies in the short to medium term. The sector will argue the relative legality of such a move and the possible financial penalties not to mention the fact that this will further weaken their balance sheets.
This battle between the UK government and mortgage lenders in the UK has been ongoing for some time now and despite the fact it appeared to be resolved just a short number of weeks ago we do not appear to be any further forward today. Whether additional funding is required, the government need to relax regulations or indeed the stick needs to be used very much remains to be seen.
Share this..
Related stories
Can sporting events impact upon the economy?
Today's victory by the England cricket team, which saw them snatch back the Ashes from the Australians, has given UK sport a massive boost in these most difficult economic times. However, there is a debate ongoing as to whether sporting events can actually impact on the economy and if so what kind of impact they can have.
Those who are sceptical of the impact of sporting success on...
Long-term unemployed in the UK has doubled in 10 years
The number of long-term unemployed in the UK has doubled to over 200,000 in the last 10 years according to the Trade Union Congress (TUC). The TUC has been very critical of the jobseekers allowance which pays out £64.30 a week, which is actually less than the poverty line in the UK. The fact that the number of long-term unemployed is continuing to rise is another major concern for the UK governme...
Read MoreWebsite issues store card warning
Store cards from retailers Karen Millen, Oasis and Principles have been put up by as much as 4.3 per cent, Moneyfacts.co.uk said yesterday.According to the financial website, customers with these cards are now facing APRs of 29.8 per cent on all their purchases.The hikes also come in the run-up to the big Christmas spend - the busiest time of the year for retailers.Inflation is also at a 16-year h...
Read MoreHow can we avoid growth in insolvencies?
The news that more than 10,000 UK citizens are being declared insolvent each and every month is a damning indictment of the boom and bust cycle ever present in the UK. Personal debt is now in excess of £1.5 trillion and more and more UK consumers are going to struggle in the months ahead. Indeed, while an average of 10,000 UK citizens were declared insolvent each month in 2009 this could actually...
Read MoreIs It Worth Using Collateral To Reduce Loan Costs?
When you strip away the hype, the different payment terms and the array of different loan offers in the market the bottom line is the same, the more guarantees you can give to repaying your loan the better the rate. For this reason alone we are seeing more and more people using assets which they hold, such as homes which have been paid off or investment bonds, as collateral in the hope of obtaini...
Read More