Pressure on Gordon Brown over housing market
According to recent reports the Prime Minister, Gordon Brown, has been under increasing pressure over the past few days to follow the example of the United States is devising some sort of bailout plan for the housing market. The US government recently announced a $700 billion proposal that would be aimed at bailing out Wall Street, although the plan has come under severe criticism because it will be the taxpayer that foots the bill, and many are concerned that most taxpayers will not even benefit from the plan.
However, Gordon Brown has now found himself at the centre of pressure to put into place a similar plan. The Treasury is also conducting a review into how the UK mortgage market is financed, and concerns are being further fuelled by industry reports that claim house prices could plummet by 25% leaving many homeowners facing negative equity. It is thought that the Chancellor of the Exchequer, Alistair Darling, will make a decision in the coming weeks as to whether money will be earmarked for such a bailout, although this, like the US plan, would be funded by the taxpayer.
Sir James Crosby, a city banker, is conducting the review, and has already put forward preliminary proposals.
One official said: ‘We’ll want to see what Sir James says. If he comes back with something credible that doesn’t expose the taxpayer to too much risk then we would be wrong not to consider it.’
An official from the Royal Institute of Chartered Surveyors stated: ‘A lack of mortgage liquidity is the key issue which is keeping the housing market from showing any real sign of recovery. While money is scarce, many will continue to be denied the next step on the property ladder.’
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