Gordon MacRae: Housing bubble must remain burst in Scotland

THE recovery some mortgage lenders want – the return to high-risk 95 per cent loans – is not the recovery we need.

On Monday, the Financial Services Authority published its Mortgage Market Review, which could see stronger checks on a customer's financial situation, a clamp down on self-certification, and regulation of second charge lending and buy-to-let loans.

The first-time buyer market is vital to getting the economy moving again, but there is no sense in giving a mortgage to someone who cannot afford it. This must also include people who self-certify as well as first-time buyers.

Every day, Shelter Scotland's advisers see the misery of homeowners who have fallen into arrears or are being repossessed because lenders have handed out mortgages they couldn't afford. The FSA must ensure the dark days of reckless lending never return.

As one of the key providers of arrears and repossessions advice in Scotland, we have a duty to protect consumers, and we have tirelessly campaigned for these regulations. Now the FSA has accepted the need for tougher action, it must drive the changes through as soon as possible.

The proposals to regulate buy -to-let mortgages are also to be welcomed, and can ensure these new landlords act responsibly towards their tenants.

We have seen many buy-to-let landlords borrow excessively, believing they'll make quick profits, but when these amateur landlords hit financial difficulties it's innocent tenants who suffer.

Irresponsible lending has a human cost for the families and children evicted or repossessed through no fault of their own.

We have seen a 130 per cent rise in calls to our helpline since the end of last year from people faced with repossession or mortgage arrears.

The Council of Mortgage Lenders estimates that this year we will see over 6,000 people across Scotland repossessed.

Every repossession is an individual and social tragedy. Scotland cannot return to the housing bubble of the past.

Gordon MacRae is head of external relations at Shelter Scotland