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The Power Hour

more confidence comes into the market like with slightly less risk than we were before, this will come over the coming months with people feeling a little bit better about it. Mum and Dad will say: “Don’t you think it’s about time you got a property? We’ll help you with that,” because actually some Mums and Dads are probably getting quite nervous about their kid not getting a mortgage right now even if they have a deposit. So I think the new schemes that are out, whether it’s the Bank of Mum and Dad schemes, whether it’s the MIG schemes, will all help develop that confidence and give people options. But that solution in itself is moving in the right direction. JW: Is it asking for Mum and Dad to contribute to a mortgage or is it just to underwrite it? CH: There are different sorts. We need to see more options because the people who I talk to, the mums and dads, and I for one have contributed to my child’s deposit, is fairly faithful because you hand the cash over. We need to recognise that the Bank of Mum and Dad is there, it’s probably one of the biggest banks in the UK. But until we offer ways of accessing the Bank of Mum and Dad as equity, but for some people it feels ok to put a charge on a property but for some people it feels ok

to put a charge on a property, for others it doesn’t, so there should be other variants that say I can put £20,000 into a savings account. RS: You touched on something important earlier, the challenges the societies have got with the regulator in doing some of that business and I think that one of the problems we’ve got is a regulator who is, let’s say, “one size fits all”. They have set rules which fit this core part of the market and a set of bureaucratic regulators who are not entrepreneurial enough in their thinking. So anyone who comes with anything that doesn’t fit in that convenient little box that they think is a mortgage, shouldn’t be allowed in their world, which has to be wrong because you have to have that capacity in funding. TW: I don’t think they’re trying to have one size fits all. I think they’re trying to have a sustainable mortgage and housing market and that’s what they’ve been trying to do and a lot of things that we’ve done in the industry are very sensible, long term and sustainable. CH: We’re an example of a lender who pitched up to the regulator and said, “we want to do 100% LTV lending, how about it?” And they ticked the box. There’s no sign off on products but you’ve still got to keep them abreast of what you’re doing.

HSBC HAS PLEDGED TO LEND £3BN TO FIRST- TIME BUYERS BUT OTHER LENDERS AT MBE TOTALLY FAILED TO SET THEMSELVES A TARGET SAYING IT WAS COMPLETELY UNREALISTIC. WHAT ARE YOUR VIEWS? TW: Why would you want to set yourself a target as a lender? I can understand if you’re HSBC, you would. It’s politically advantageous to, it would make sense to but other than that it’s absurd. NS: I do have a lot of sympathy for that point of view but I don’t see a problem with a minimum. I don’t see a problem with Lloyds saying, “We’re going to do £20-odd bn this year and the minimum that we’ll do in first-time buy is this,” because it shapes the market a little bit, gives the market confidence and the


great thing about HSBC is that because they got so much press is that it was reassuring and it was quite exciting that they were going to lend £15bn. And they’ve actually got the gumption to say we’re going to do a minimum of £3bn in first-time buying. I don’t see a problem with that and I would like to see personally, all of the other lenders say something similar and I could have it all up and think that we’re going to do ok.

SETTING YOURSELF A MINIMUM THOUGH, CAN YOU DO THAT AS A LENDER? CH: I don’t think we can because there are so many variables in the market place that you can not commit to a number. What if stamp duty goes whizzing up, what if it goes down, what if unemployment goes shooting up? You just can’t do it. RS: I think if HSBC come out and say that and Lloyds come out and say that and Santander comes out and says that then market share is confidence shaping. NS: That’s a bit insulting to Charles. CH: No, I understand. JW: It’s a great piece of PR, talking about commitment to customers that they have this ambitious and brilliant mortgage scheme, that’s brilliant PR.

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