Homeowners suffering negative equity need more help

Vince Cable, shadow Chancellor for the Liberal Democrats, has said that homeowners suffering negative equity need greater help. Cable has also criticised the banking system as a whole, he said that the system is failing to realise its lending practices, he also added that the banking industry had become reckless in recent years.

Cable’s announcement follows the British Bankers Association (BBA) announcement, they have stated that mortgage approvals had fallen to an all-time low; the Lib Dems has added that repossessions are likely to increase dramatically in the near future. Cable has made claims that these BBA figures suggest that the housing market in the UK is in a severe slump, he also expects further falls.

Cable has also said that the banking industry is to blame for the current bubble in house prices, he said “I wish the BBA, which is now facing up to reality, had been equally clear-headed several years ago when it was already becoming clear that reckless, indiscriminate lending was feeding an unsustainable boom in house prices. This was bound to come to a sticky end.”

The Liberal Democrats are now calling on BBA to work towards developing mechanisms so that they can cushion the effects of the current house price crash and to help those suffering negative equity and those at risk of repossession.