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Rock revival

Robert Peston | 09:10 UK time, Monday, 23 February 2009

The number of house purchases financed by mortgages fell by half last year, in part because of a collapse in the availability of mortgages.

Northern Rock logoThe Treasury had a role in causing this trauma - which made it particularly difficult for young people to buy homes - because of its insistence that Northern Rock repay £27bn it had borrowed from us, the taxpayers.

Some £18bn was repaid last year - a rare bit of good news for the public finances that is seen by some as a disaster for the wider economy.

But the Rock has now been told that it doesn't have to repay the rest, for now at least.

And the government will provide around £10bn of new taxpayer loans to the Rock so that it can start providing new mortgages.

In total, the Treasury's decision to revitalise this nationalised bank will mean that there should be £28bn of additional finance for mortgages in the UK over the next year or so compared with 2008.

That's equivalent to more than 10% of all gross mortgage lending last year - making this arguably the government's most significant attempt to prop up the housing market.

So the big question is whether there's actually an appetite for mortgages, whether the problem right now is a shortage of loans or a collapse of confidence by possible buyers and a lack of demand.

My understanding is that the Rock will endeavour to exploit what demand there may be, by offering mortgages that may be more suitable for first-time buyers than much of what's on offer from the big banks.

I'm told it will offer mortgages worth 80% or 90% of the value of properties, compared to the 75% loans that are now the industry norm.

That may not represent a return to the Rock's extreme bull-market ways of offering 100% mortgages - the kind of behaviour which the prime minister yesterday suggested should perhaps be outlawed.

But a 90% mortgage is not exactly risk free, at a time when house prices are still falling.

What's also significant about the Treasury's announcement is that it can be seen as confirmation of the government's intent to revitalise the Rock and - in time - return it to the private sector.

However there's a signal that Northern Rock's stock of existing mortgages contains too many toxic loans for them to be left inside a bank that wants to thrive again: so the book of older mortgages is being hived off to be managed separately from the new improved Rock that will provide new loans.

Is it realistic to expect a serious Rock revival?

If the defiant pride it generates in its home in the North East is anything to go by, Northern Rock can prosper.

On my recent visit there, I was struck by the burning desire of almost everyone I met to see the bank reborn as a prudent bank for a new financially conservative age, rather than the shamed victim of the credit bubble that turned to crunch.


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  • Comment number 1.

    Is this not just Brown's latest desperate attempt to re-inflate the property bubble prior to next year's General Election!?

    It just looks like more reckless gambling with other people's money.

  • Comment number 2.

    No matter how much money is available for mortgage lending, in the current market anyone who borrows more than about 75% needs their head examined. Ditto any bank that lends more than that.

    We are currently looking to buy and have a good deposit and fairly secure jobs but until we are convinced that either the housing market is close to bottom or our jobs are 100% secure our money will stay firmly in our account, even if it isnt earning any interest. We have work hard for it and are not about to gamble it away!

  • Comment number 3.

    Hmm... Cuddly last paragraph there, Robert - but I'm still not expecting to see an effigy of you in your cloth cap being welded onto the neck of the Angel of the North.

  • Comment number 4.

    Ah! last...we now know the vehicle for the Govt's strategy of Quantitative Easing...aka PRINTING MONEY.

  • Comment number 5.

    Desperation by the Brown/ Darling incompetae. Does anybody think it's a good time to buy a house while prices are dropping ? Hang on and they'll drop another 10% at least and there will be another 50,000 repossessions on the market by the end of the year. Not content with bailing out a dying bank, they now intend to commit 10 billion more of taxpayers cash on a mad attempt to get some of the coming 3 million unemployed to take out a mortgage. The government is flailing around in the dark, with no clear strategy to help the economy, merely a series of disjointed ideas which inevitably fail and are quickly forgotten and superceded by another pointless initiative. If they were to resign, there would be an immediate upsurge in confidence in the economy which might help.

  • Comment number 6.

    "If wishes were horses then beggars would ride."

    And they probably will. As round and round we go. Down and down we go. All of us caught in Brown's frantic spin.

  • Comment number 7.

    Why don't they just allow residential properties in a SIPP instead? It will still be tougher for first time buyers to get on ladder, but atleast we will have a housing market standing firm and banks won't have to write down assets.
    If they allow it in the SIPP most people won't need a mortgage either and save the banks from lending for houses and they can concentrate on lending businesses instead. Lending to businesses is more important IMO.

  • Comment number 8.

    "100% mortgages - the kind of behaviour which the prime minister yesterday suggested should perhaps be outlawed"

    We must be even more equivocal than 'should, perhaps' Robert, because what he actually wrote was

    "We want to see loans made … to first-time buyers and those on middle and modest incomes who wish to buy their home but who have not been able to save a huge deposit …we have asked the FSA to look at how in the future we should control new mortgages for more than 100% of house value"

    That's very different, isn't it ? Despite all the weekend spin,Brown positively envisages new high-LTV mortgages.

  • Comment number 9.

    Anyone who borrowed money from Northern Rock would need their head examined. They have been mercillessly tossing people out of their homes at the bidding of the government since they were nationalised and I would not trust them not to do the same again when it suits Mr Brown. They should be boycotted by consumers for turning their back on their customers at their moment of need.

  • Comment number 10.

    "making this arguably the government's most significant attempt to prop up the housing market. ".....

    could someone tell me why the housing market needs to be "propped up"? It was the "propped up" housing boom that caused the problem in the first place.......this is just another GB daily headline,grabbing, diversionary tactic......

  • Comment number 11.

    Although higher LTV mortgages are risky, these risks can be reduced. If lenders want to bring out higher LTV mortgages to first time buyers, 90 to 95%. It would be a good idea to place these loans on longer fixed term deals over a period of 10 years. They could offer a slightly higher rate for the risk and realistic exit penalties should they wish to move. However when you are no longer a first time buyer then you LTV should be lower. One thing that time has shown us that property prices rise and fall and over a period of 10 years the market will be different again!

  • Comment number 12.

    I can understand that the government want to re-start the housing market. However, a number of issues concern me:

    Why would anybody want to take the risk at the moment. House price have not stabilised and are unlikely to do so in the near future?

    The spectre of unemployment is stalking the land. Why would you want to take the risk.

    Will these 'new' mortgages be open to those houseowners who are coming to the end of their present fixed contracts?

    The whole house issue is only a symptom of the present depression. There are numerous other issues that require our attention - though perhaps not as emotive.

  • Comment number 13.

    What a pious comment from the PM!
    He comes out and says that 100% mortgages are bad now - they should never have been granted in the first place - where was he when this lending was taking palce and he was giving us the 'never had it so good' comments about the economy - more people buying houses etc.
    The role of the FSA must also be called into question here - are they not the regulator for the Finance Industry?
    Many people in the banking industry were talking about the folly of 100% mortgages at the time of granting them - let's make sure it never happens again.
    Shame on you Mr Brown!!

  • Comment number 14.

    The political and banking elite will do anything to retain their power. Trouble is, they've so overcooked the system, they now have absolutely no idea how to fix it - it's snowballed completely out of their hands.

    We really should all be making plans for what happens if we wake tomorrow and money has no value.

  • Comment number 15.

    If this is such a good idea why was the government reducing the mortgage book? Full speed ahead ,oh sorry full reverse!

    You will be telling us next that the plans for reviving Northern Rock are because it is in a Labour heartland which is now at Stanlinist levels for public sector employment. I notice there are no such plans for Bradford and Bingley.

  • Comment number 16.

    This is really about Gordoom trying to revive his corpse. However, FAIL, It won't make a jot of difference to the many first time buyers as they cannot afford the 25%+ DEPOSIT (let alone the 2-4 X salary rule which some also can't meet). Those who could meet the lending rules will simply use it to remortgage on a better deal (if it is better) or won't bother at all (who is going to take out a big loan in the middle of a recession?). The only way to help the lower paid and first time borrowers is a properly though out shared-equity scheme.

    As an aside, so LDV want to go electric.
    At what prices are these vans going to be sold?
    Who is going to buy them in the recession?
    Have they got a working prototype?
    What is the range between charges?

    Without Govt forcing companies to buy electric vans, its unlikely anyone will buy them as they will be inferior to petrol / diesel except on emissions. Too many vehicles being produced, not enough customers, shut it down.

    If the car industry is in such a state, where is the fire sale - no they would rather sit them in a field and expect taxpayers to pick up the tab - any other business (ok not banking) would have sold off the excess stock at knock down prices. There is over capacity, shut some of them down too - particularly Jaguar.

  • Comment number 17.

    Whilst I wish every genuine NR(ex)employee well for the future......I wouldn't wish to be associated with a bank that's caused untold misery for many thousands of ordinary folk.Yes, i know it's guilt by association but it's about time we stood up for what's morally right in this toxic ridden finance environment.

  • Comment number 18.

    so with average prices roughly 200k or more in some areas.

    first time buyers in particular will be virtually killed off because the government will make it doubly difficult for anyone to get a 90% or more morgage .

    if the industry norm is 25% deposit than people will need something like 50k desposit in some cases more.

    fact is the housing/morgage market will never be the same again,lending will never return to pre credit crunch levels and we will fastly become a nation of tenants rather than home owners.

  • Comment number 19.

    However there's a signal that Northern Rock's stock of existing mortgages contains too many toxic loans for them to be left inside a bank that wants to thrive again: so the book of older mortgages is being hived off to be managed separately from the new improved Rock that will provide new loans.

    Tut tut, starting a sentence with "however"

    Robert, does this sentence tacitly admit what Brown has continually resisted? Namely the setting up of a "Toxic Bank" to take and oversea all those dodgy bits that are stopping our banks from operating properly?

    At what point, therefore, will these self same institutions actually pay for these mistakes?

    Surely we would have all been better setting up a new institution that was capable of buying all the realisable assets when we allowed all these "banks" to fail. The "profit" would have been instant and convertible.

  • Comment number 20.

    Anyone who can wait wont be buying a house while there is still no end in sight of the market falling.

    Whens that election again ???

  • Comment number 21.

    No, it's their cashflow profile, if you refer to a posting I made explaining it about a fortnight back, basically they've cashed in what they could and now it slows down, very much like a slide back down the exponential curve. What's inexplicable is that they are still issuing fresh mortgages before the bottom of the slope: one hopes those taking them are being made aware that they are locking in big negitive equity risks. There's always people forced to move even in times like this who have no option - the alternative is a crash which will inevitably overshoot the real market price, in this case putatively to zero.

  • Comment number 22.

    I agree with #2.

    Lending at more than 75% is just not sensible at the moment so why risk it?

    On a related topic I have been monitoring LBG loan rates for a few months as my car is on its last legs. A few montsh ago - prior to the last two rate cuts I could have got a loan at 7.9%. Today, for the same amount (£10,000) they're 'offering' me a rate at 8.7%. How does that work when banks are supposed to be lending and rates have been cut twice??? I've been with them for 37 years so they know me and I'm a 'good' risk. My 10 year old car will be running for a long time yet.

  • Comment number 23.

    Well how does the BBC view plagarism? If you had posted my coments on the Toon Army v Me at 10.07 and later 10.54 on Saturday, both blocked this article would have seen the same sentiments expressed . Could it be that they just intermated what Robert has said here?

  • Comment number 24.

    I really do hope that Northern Rock can prosper once more in the commercial sector as you say but as long as it has learn't its lessons along the way. If the government plan to put Northern Rock back into the commercial sector then perphaps it can just give back the shares to the Northern Rock shareholders it confiscated them from - or would that be too simple !! maybe with the promise that no dividends would be paid until all the taxpayers money has been paid back might be a condition.
    Overall getting NR to lend again, is this not a major U turn by the government and a sign of true desperation.

  • Comment number 25.

    "If the defiant pride it generates in its home in the North East...."

    Then will the 'proud' North East pay for Northern Rock?

    Of course not.

  • Comment number 26.

    Robert Are you and GB saying that providing 100% mortgages in a market that is rising at 10% per annum is less risky than providing 90% mortgages in a market that is falling at 12 to16% per annum and which both the BOE Governor and ministers have predicted will continue to fall for another 12 months- Are we suppossed to swallow this guff or that GB has a clue what he is doing.
    You say that there is a signal that NR's stock of existing mortgages contains too many toxic loans for them to be left inside a bank that wants to thrive again. where has this signal come from?
    These toxic loans as you call them are also toxic assets that appear on NR's balance sheet presumably signed off by both their auditors and Directors in statements to the share holders prior to the bail out.
    So when are those that mis led NR's share holders going to be brought to account?

  • Comment number 27.

    Any lender who lends more than 75% of a house's value at the moment is likely to be subject to a mis-selling complaint in a couple of years time - it's irresponsible while house prices remain so ridiculously inflated in relation to local incomes. Mortgage rates are at teaser levels now - how will people repay when inflation and interest rates hit the roof as the country struggles to pay off all its debt? the Rock should continue to pay back its debt before it starts lending again. then it might learn its lesson, and so might the rest of us. Booming prices have to bust, delaying it won't put it right. The banks seemed to have learnt something but the government hasn't.

  • Comment number 28.


    Exactly right mate-spot on.Just what i advocate in my later(17)blog as yet unseen and(58) on RP malus blog.

    The expression "beware of greeks bearing gifts"springs to mind.Once you're drawn into the honey're stuck.Who knows what these clowns of politicians would have lined up for us once they've got their victims to sign on the dotted ? about as much as a sat nav in a submarine.

  • Comment number 29.

    RP, whether it is a good time to buy depends on the motives of the buyer, if the intent is a home for the long term then i would suggest the difference between rent and mortage payments still makes buying a good option, if people are looking to make a fast buck on the property market then no.

    for northern rock lets hope they and all others can recover to be good lenders for genuine home buyers.

    Finally, when i bough my house 19 years ago it was on 100% mortgage. to do this i had to pay an extra 1.5% charge in the first year as an insurance premium. Maybe i should have saved a deposit but to me this was far from irresponsible on both mine and the lenders part.

    To me the problem is leanding to highly leavered investors rather than the %age lent to genuine first time home buyers

  • Comment number 30.

    Whose figures are right - you are saying that the Northern Rock new money is equivalent to a massive 10% of all mortgage money required or George Osborne stating that 5bn against a mortgage market of 250bn is insignificant?

    Are you not guilty of adding all the negatives together to make a positive?

  • Comment number 31.

    Almost bewildered by the reasoning behind Brown 's daftest pronouncements, I think I've finally cracked it. Having achieved the almost impossible task of becoming Prime Minister without having been voted for by a single member of the electorate he now believes himself to be Brown the Invincible - Brown the Miracle Worker - Brown the solver of the World's
    problems - to whom the usual laws of cause and effect to do not apply. I think he means well.

  • Comment number 32.

    If you can get an unsecured loan for any amount then why can't you get a secured loan? Once again Brown is spinning and saying different things. From a creditors' point of view any security is better than none. The quality of the security and the safety margin are a measure of the risk and should be reflected in the price.
    I saw nothing wrong with 125% mortgages if the borrower was in secure employment with good prospects for increasing their income such as someone starting out on a secure career. I have no doubt many have benefitted from such arrangements.
    What was wrong was the failure to adequately cost risk and the desire to offer these packages to those without secure employment or proveable income with a view to securitising the debt. That is the mischief but the market has sorted that by closing the market for securitised debt. The more mortgages that lenders have to keep on their own books the more sensible they will be but legislative bans are not the way forward.

  • Comment number 33.

    "But the Rock has now been told that it doesn't have to repay the rest, for now at least."

    What ???????????

    So If I borrow £27bn from the taxpayers and pay some back, I could then start lending out prior to paying of my debt? Is this how it works ?

    This is another risk of Taxpayers money to to try and re-elect Gormless Brown and his cronies

  • Comment number 34.

    For a change the government seems to be making a good call here. However, mortgage lending comprises two fundamentals - LTV and income multiple.

    For the majority, house prices remain too high for would be buyers to secure a mortgage because they simply don't earn enough. Prices need to fall further before "prudent" lending can commence.

    Any attempt to stabilize prices at current levels is naive. My personal view is that house prices will settle at around the level they reached in 2000/2001 before we can confidently move forward.

  • Comment number 35.

    I hear Darling saying that this allows the Rock to take up a position in the market once the floor has been reached and confidence returns to the housing market

    So he still has no idea about when this is going to end, and apparently hasn't signalled when he believes that the Treasury figures demonstrate

    Myself I would say that Average house price needs to fall to 3x average income, once that happens you'll see confidence return.

    It is also interesting to note that I haven't seen any advertised commercial property rentals falling in spite of Crash's removal of the "empty" rates period.

  • Comment number 36.

    I feel exasperated by all this. Back at the 2005 Labour Party annual conference Gordon Brown spoke of there having been a bubble in the property market. Past tense. At the time it just summed up for me this former radical socialist's financial illiteracy. The Tories really need to step up there game so that we can move on as a country. Brown must go now.

  • Comment number 37.

    did I add my signature to the banks getting their loans from overseas and other investors ? no
    Did I give permission for the banks to be bailed out in my name ? no

    well then, let the bankers ( I use bankers as a collective term for the lot of them )
    pay off the loan, none of this ring fencing toxic debts , Im not paying it

  • Comment number 38.

    Why don't they just allow residential properties in a SIPP instead? It will still be tougher for first time buyers to get on ladder, but atleast we will have a housing market standing firm and banks won't have to write down assets.
    If they allow it in the SIPP most people won't need a mortgage either and save the banks from lending for houses and they can concentrate on lending businesses instead. Lending to businesses is more important IMO.

    Just imagine I can own my house with my SIPP and I the banks can use up the freed up capital to lend to businesses.

    The only problem with this plan is that people will start taking money out of the financial industry, mutual funds etc.

    And we all know Brown and other labour leaders have good friends in the financial industry. So this won't be allowed.
    Why should a taxpayer give money to fund managers in the hope that one day that will provide for there retirement. Why not just buy your own residential property using your SIPP funds and that will provide for the retirement.

    How can we trust the fund managers to provide for our pensions. How can we trust guys like Madoff, Stanford, Worldcom, Enron, Anderson consulting, Satyam, list is endless.

    Why does the government encourage us to trust these corrupt people?

  • Comment number 39.

    The Rock was what caused the downturn to become a crash/deep recession

    Shame it took them more than 12 months to realise just what they had done. Public sentiment has gone from vaguely posative to downright scared of the future.

    I doubt that this particular sticking plaster will be any more successful than the rest.

  • Comment number 40.

    £100,00 property, 90% mortgage from Northern Rock = £90,000 plus £10,000 deposit.
    House prices still expected to drop by 15% this year, property then worth £85,000.
    At the end of the year owner with £5,000 negative equity, plus the loss of the £10,000 deposit.
    Has "Gord the unelected" got any more brilliant ideas?

  • Comment number 41.

    There is no reason at all for making a blanket sweeping statement that all 100% loans are bad. I bought my first house in the mid 80's with a 100% loan. I was a graduate on a rising income with good prospects. The banks thought that I was a good long term risk and so I was able to buy my first home without a deposit.

    Loans over 100% originated in the last housing recession. It was to stop, for example, a growing family living in a house that was too small simply because the house was in negative equity. The family were already proving their ability to pay so the negative equity was simply ported onto the next, more suitable, property.

    Too much is made of what houses are worth and not enough about the long term benefits - and not just economic ones - from owning your own home.

    I should know as I am an estate agent and I rent!

  • Comment number 42.

    This is good news for the economy and in particular the housing market on which it has been proven during the last 12 months how dependent we all are that property assets remain stable.
    There are already clear signs in my region that the property market is very near the bottom with estate agents reporting far greatly activity than in Feb 2008.
    90% mortgages may not be as risky as Robert suggests and in fact are vital if first time buyers have any chance of a home purchase which is still by far the safest long term investment a young person can make.

  • Comment number 43.

    the bottom tier - first time buyers - needs to be helped

    speak to anyone in the industry and they will tell you this is why the market in general is not moving

    if the private sector cannot provide this finance then this is a good idea - end of!

  • Comment number 44.

    Of interest ('scuse pun' is what the strategy will be with savings. They are in the hard rock department because by definition what Brown has said recently about old style banking is balancing savings against loans.

    We shall see.......................

  • Comment number 45.

    Who is this government trying to fool?

    House prices are still too high.

    We are in recession, people are losing their jobs.

    But still the government wants us to buy houses at inflated values.

    Sheer lunacy.

    But Brown is desparate to keep the house market going.

    If house prices were allowed to fall to their true values it would mean even more write downs and therefore losses for those precious banks.

    We really are in deep s**t.

  • Comment number 46.

    Repeat from last blog, more relevant here

    Unless house prices drop much further or 100 per cent plus loans are available, whether from a financial institution, the bank of mum and dad or the state, the housing market will stagnate.

    Today a typical FTB will need

    Legal fees, survey fees, search fees, arrangement fees, VAT on fees.

    A substantial deposit, compulsory fire and other insurance.

    A high probability to need some stamp duty as well, if they are to live near work.

    Doubtless, they will also likely have a student loan/s to clear.

    Oh, and how about a bed, bedding and cooker etc?

    Oh Gordon, get real.

    The country needs shared ownership, more social housing and fewer parasitic skimmers.

  • Comment number 47.

    'Rock returns to lending market'

    seems to me that a more appropriate headline would be something along the lines of:

    'Government unable to force banks to lend so in desperation, opens doors at it's own bank and tries to paint it as good news all round'

    Seriously, the government is now lending taxpayers money into a catastrophically declining market. Yes, without any lending, the market would probably decline further, but this is like trying to stop a speeding locomotive with a flyswatter.

    The Government seems to think that everyone still wants to borrow as much money as they can, and if that cash is made available, then everything will be ok.

    Note to Gordon - Horse to water, old boy. People will borrow and banks will lend when they are good and ready. You've already proved that you cannot force the banks to lend cash, and now you are about to find out why.

  • Comment number 48.

    Gordon Brown and Darling appear to have no sense of prudence or common sense. NR pays back £18Bn last year, now the government gives it back £10Bn without demands for fast repayment.

    This is the kind of lending policy mortgage borrowers need at NR and everywhere else. Pay back 6% of your loan principal each year and get a cash pay back of 3% of the principal with no demand for repayment in the near future.


  • Comment number 49.

    What a pity this was not done much sooner. The government threw away the advantage of having nationalised Northern Rock instead of propping it up by loans as it has done with the banks.

    Because of fear that the Tories might attack the government on the basis of the risk of "taxpayers money", the Rock was ordered to behave just like the private banks and sort out its balance sheet as quickly as possible, even if this was not in the national interest.

    The reluctance of the government to use temporary nationalisation, rather than bailing out, has crippled the government's efforts to deal with the recession.

  • Comment number 50.

    Government announces a new generation of sub-prime!

    There's no shortage of mortgages for people who are a good credit risk. Just a shortage of us wanting to buy a highly-leveraged asset in a falling market.

    Only the core sub-prime market, those with nothing to lose, will be applying for these new mortgages.

  • Comment number 51.

    House prices need to fall another 25% or more before they can be considered realistic.

    The Govt must therefore continue to provide downward pressure by ensuring mortgages are difficult to come by.

  • Comment number 52.

    This is good news I suppose.
    But let's hope that everyone now realises the dangers of wildly over-pricing property.....everything from personal and national bankruptcy to bank collapses and serious political unrest.
    Remember the income multiples...or we all go under.

  • Comment number 53.

    This is sill a drop in the ocean Robert. Furthermore, as I suspect you know, there's an awful lot of 'fear' out there at the moment. This is why people are paying down their debts as much as possible. This 'fear' means there'll still be little appetite for mortgage loans given the continuing reduction in house prices. The reality is that houses are still over-priced. Until this key 'asset' reflects our real ability to pay for it there'll be little to celebrate for the ordinary punter.

    If you want an indication of where we will be soon take a look at the shared equity schemes the builders promote. Their headline prices (just to get them on the online web-sites) are generally pitched at what they, the builders, really think the value of their new flats etc. are. This is often 50% lower than the price they'd like to get. They know they might get interest at these prices but not if they're priced higher. They still want to buyer to take the full depreciation of these new properties while giving the impression that the properties have been marked-down. I suspect that more mortgage finance won't alter this situation as there's still a massive risk associated with buying any property (especially new ones) at the moment.

  • Comment number 54.

    Here he go again ...

    So 100 per percent mortgages are outlawed and 90 per cent mortgages for first time buyers will be standard?

    There's nothing like the dead hand of incompetent, ignorant government to bring back a flicker of life to a corpse before it returns to to the pit.

    If the main cause of the current financial shambles was inflated property values through criminally bad lending then the solution is for property (indeed, all asets) to fall to real values.

    We cannot print enough money to bail ourselves out for ever.

    This is madness. It must stop. The present government got us into this. They cannot be the people to get us out of it.

    We, ourselves can do something positive to recover - all together now : GENERAL ELECTION!

  • Comment number 55.

    One the main reasons that Northern Rock has paid so much money back to HMG is that it has been among the most aggressive
    in repossessing many of its sub-prime dodgy mortgage properties.
    I wonder how those who have been put of their homes by NR feel now?
    Perhaps they could apply for a new mortgage !!!!!

  • Comment number 56.

    How sad that the financial fate of millions in this country are being determined by a couple of people who appear completely out of touch with economic or social reality.

    As mentioned in another post #10 (I agree) that it makes no sense to talk about ". . . propping up the housing market."

    Let the market do its own thing. The sooner it is allowed to clear out the losers like NR who pursued irresponsible lending policies (also RBS and HBOS) the sooner we would hit true bottom. But no! Brown and Darling have got to meddle, cause confusion, create uncertainty, change their minds and generally prolong the pain.

    Now they want to sacrifice even more people to their folly. None but a fool would buy into this market with a substantial mortgage, unless they want to face repossesion within 3 years. But the fools at the top cannot even see this!

  • Comment number 57.

    Robert, it's good to have you back to keep an eye on the situation.

    As I understand it, 90% morgages are available but ONLY 90% of the bank's valuations which seem to be about 65% of current markey value.

    This still makes it virtually impossible for a first-time buyer to get on the ladder - even if they want to.

  • Comment number 58.

    Never mind about the percentage of the house price, what multiple of a persons annual salary will be lent? Is this no more than the taxpayer underwriting a new housing boom. As the people funding all this we have a right to be kept informed.

  • Comment number 59.

    BBC Breaking News!!

    "Slumming it with millionaires clinches Best Actor for Brown at Oscars!"

    'Breathless dialogue that moves at light speed', says one commentator
    'Great to see a movie that's all talk and no action', says one pundit
    'All done with British money too', says Brown
    'Darling should have got best supporting actor', says magazine
    'A real lightweight comedy duo', says critic
    'Sequel already on the drawing board', says
    David Cameron.

    Repossessions and foreclosures rising and nobody came..


  • Comment number 60.

    How many first time buyers are needed to join the housing SNAKE before the market bottoms out?

  • Comment number 61.

    Save the housing sector and also the governments blushes? - No.

    Step in the right direction? - Yes Providing that sensible lending criteria are applied.

    The best outcome would be that Northern Rock returns to being a relatively small lender, run along the lines of the old mutual society it once was. This time run on a sustainable basis by finance professionals and not a Ridley or Applegarth in sight.

    Of course we as taxpayers will be landed with a whole lot of toxic assets (along with those of the other latter day rogues) in a state run toxic bank. We won't get a healthy return and my Grand kids will end up paying for it.

    From where I am standing, the only prudent action for the government to take would be to lay down in stone a new framework under which NR and the other banks should work, primarily specifying maximum Loan To Value rates and income multipliers. This will cause short term pain for long term gain - possibly driving the market value of property down, but at least achieving a stable and sustainable position more quickly.

    The banks then can compete and differentiate their products by means of interest rate and quality of customer service. Or have they just forgotten about such a thing?

  • Comment number 62.

    Oh! for goodness sake people on this blog constantly talk about Robert being a pessimist but most are flogging the same dead horse!!
    We need someone, somewhere to start being postive, looking for opportunities and they are there, for those with vision or we are all guilty of talking ourselves into destruction!!
    The media could lead on this but being positive is not a trait that sits well with journalists!

    Maybe everyone here hails from the South and we are made of stronger stuff in the North??
    We have seen it all before up here, we are used to being let down by the south, we have had more bad times than they have had hot dinners, so we are always ready to look for the positives. Maybe for the very first time people in the South are getting some of the medicine that has always been dished out to the North and they don't like it!!

    There is so much pride in the North. You ask anyone up here what they think of OUR Millennnium Bridge and to a man (and a woman) they speak with pride about it. Designed and built locally.
    Ask Londoners what they think about their 'wobbly bridge'?

    The wealth of this Country was in the past built on the backs of honest hard working men and women from the North. That might be unpalatable for many people but if you care to look at history it is so true!!

    If people really care about what we are leaving for future generations, we all need to start pulling in the same direction. People in the North look out for one another, are pleased not envious when people succeed.
    They take people into their hearts, take Bobby Robson's Cancer Appeal. He said it was ordinary people, people he didn't know, they have so much love and so much respect for him. We are different up here but maybe its time for the North/south divide to be buried once and for all and we make use of talents from whereever and start bringing pride back into everyones lives.

    It is so very easy to keep constantly complaining about the Government and what they should and shouldn't do, haven't done, should have done! Its like every football supporter in the Country knows better than the manager how they would make sure the team won every single week!! Piece of cake!!
    Its so easy sitting in the comfort of ones home to make such statements.
    I could easily win Mastermind or Who wants to be a Millionaire sitting at home but it would be Oh! so different sitting there.

    Its so easy for Ken Clarke, David Cameron etc etc to sit there and slag off everything. That is child's play, school playground mentality but to actually be constructive takes much more effort, more thought, more humility, more courage.

    We all know its a global crisis because every Country is in the same boat.
    Robert you know full well that our Government couldn't have regulated the financial sector here in the UK because if it had, investment would have drained out of the UK like a biblical flood and we would have been totally isolated and the Government would have been laughed out of existence ( who ever had been in power).

    Now with all Countries admitting that they all got it so very wrong they can, if they are serious make the financial sector squirm and come in to line with stricter controls. The ultimate loser will be the USA but be under no illusions some new scams will eventually rise out of the ashes because rogues & thieves will always exist.

    I don't mind negative reporting if it is accompanied by balanced reporting. The media always talk this Country down, its a British disease, flowing from the pen's of journalists but they could just as easily be positive and helps those businesses trying so very hard to maintain jobs and keep going.
    We are part of Europe but we get so very little information on what is happening in other Countries and how they are tackling the situation. We talk about a global economy and yet the media is so small minded, so parochial, it cannot even look further than its nose.
    Maybe other Countries are tackling their own crisis in very inventive and innovative ways. The media could highlight these and be positive and help the situation.

    Governements can do so much but the media have the ultimate control and can help us out of this mess or destroy us and i don't think most journalists take their enormous responsibilities seriously enough.

    Back Britain or die!!!

  • Comment number 63.


    Appears the Rock will no longer be encouraging people to leave after their current fixed terms ends.

    They'll also be able to offer remortgages,

    Keen to point out it will be responsible lending, at a competitive return for a commercial profit.

  • Comment number 64.

    Just a quick note to say that I was very impressed with the title of this article - "Rock Revival".

    Brilliant !

    And no, I have no economic or other meaningful comments to make about the content of the article, too busy with worky stuff.

  • Comment number 65.

    Some interesting comments

    Still think Government is in in a very numpty moment.

    I wouldn't borrow from the Northern Rock - after all if it all goes wrong it will probably be withdrawn as quickly as it was lent. Besides which I dont like the idea of borrowing my own money and then still not being in control of it !

  • Comment number 66.

    Nice to see the government doing a U-turn. Is this a sign that we might get some realistic policies going forward? I won't hold my breath.

    The entire idea of taxpayer support for the banks was that the innocent did not suffer from a credit crunch whose origin lay elsewhere. However, once The Treasury intervened it was the innocent that got hammered.

    More money into the mortgage market will help those who are needing to remortagage as their fixed interest deals come to an end. They might even get a better deal given the way my savings have been flattened into the ground.

    Whilst house prices are dropping and will continue to fall, there will still be a demand for mortgages as life continues; slump or no slump.

    However reading between the lines, if mortgages are going to be 85% of three times annual salary, then surely the average house price has to drop to £75,000 with an average mortgage of £63,750. This will require first time buyers assemble a deposit of £11,250.

    How realistic is this?

  • Comment number 67.

    This is a scam.

    All uk mortgages are covered by insurance against default therefore a uk only mortgage bank holds no uk 'toxic' mortgages.

    The insurance companies that issued policies are the ones holding the potential uk defaulters losses.

    So where have these 'toxic' mortgage liabilities come from ?

    They have come from lending uninsured money abroad.

    NR will use the profit from your mortgage to pay for these uninsured losses whilst the defaulters get off scot free.

  • Comment number 68.

    sounds like a last desperate attempt to restore the status quo

    I hope it succeeds

    you are correct in your estimate of North Eastern pride, we lived there for 12 years

    at what point will GB throw in the towel if this does not work?

    it only took a dead sheep to finally oust Maggie

    I think he has about six months to turn it around

  • Comment number 69.

    So 100% mortgages are now automatically bad, eh?

    I bought my house in 1997 with a 100% mortgage and had to fight like a lion to get it because the value was just over 3.5x my earnings at the time - in fact it's fair to say that I was given the third degree before the bank finally agreed to the loan, and even then I had to provide proof that I was able to pay *and* guarantors. Since then, I haven't missed a single payment despite being unemployed for a few months in 2006. Even now, my total mortgage commitment is comfortably under 3x my current salary.

    Maybe I should have waited a few months and had the bank firehosing money at me instead? Maybe I should have, then people would be falling over themselves to help me.

    Undoubtedly 100% mortgages have their place, just not at the bloody stupid income multiples that we've become used to. Outlawing them will no doubt give Crash Gordon a warm, fuzzy feeling inside.

  • Comment number 70.

    I stand back and both watch and listen in amazement as this government tries desperately to put a floor under the housing market. House prices are still grossly overvalued and need to return to the mean average v salary.

    This is all about getting Mr Brown re-elected. It beggars belief that he and his cronies should be planning to trap yet more people into this overblown asset. He's not content with trying to pass all blame for this mess on to just about anybody else, he's actually trying to stoke it up again with more of the same.

    Anybody who's thinking of buying a house, WAIT.. this is not over by a long chalk. Prices will continue to fall until there is true affordability...

  • Comment number 71.

    The only people buying up property at the moment are speculators with spare cash.

    They are buying up property cheaply at the moment. Putting in tenants, then when house prices pick up again they will kick the tenants out and sell on for a significant profit.

    This is what the majority of activity is in the housing market. Speculators buying up repossessions and houses at rock bottom prices.

    Who in their right mind would take on a new mortgage just now when we have still to reach the bottom of the depression / recession? Also which mortgage lender is going to make a loan on a property whose value is likely to be less in a few months times and the applicant stand a good chance of losing their job.

    All this is, is hype by a govt which is in dire straights. Always with Gordon read the fine print. He never means what he says.

    I don`t see much change in the housing market for quite a while yet. Northern Rock and other lenders will be very careful in the future as to whom they loan money to. So unless you have a signficant deposit and the chance of you losing your job is more than unlikely forget applying for a mortgage.

    Mortgages maybe cheap at the moment; but wait until inflation starts to pick up then we may enter recession 2 when all the spare cash, which has come from the recent cuts in mortgage rates, disappears and families start to struggle again. This should also serve as a warning to new mortgage applicants - you maybe able to more than afford a mortgage now; but can you still afford that mortgage when rates start to rise again as they inevitably will?

    Gordon Brown has led us into this mess by encouraging people to take on too much credit and not applying the brakes when it got out of control. He should think again before he launches this country into another credit frenzy.

  • Comment number 72.

    Why should you see the repayment of Northern Rock's Bank of England debit as a good thing for the British Taxpayer?

    Surely, the more we lend out to the likes of Northern Rock, the more interest income we will receive and hence the less tax we will have to pay!


    Incidentally, I think the main problem with Northern Rock is its negative gross interest margin. Bank loans will turn bad every now and again, but paying savers more in interest than you are charging borrowers is pure madness.

  • Comment number 73.

    A really interesting example of "sticky policy making". The government must have known for a while that their policy on Northern Rock was not the optimal one; but it takes quite a while to change course from an existing announced policy.

    Not just because of factors internal to the government, but because of potential criticism over "U-turns" and the desire for policy to appear resolute. But what is the impact of this stickiness on the economy? I have analysed this here:

  • Comment number 74.

    And the other danger from over-heated property markets is, of course, mass unemployment.
    I still think that the British public regard a rocketing property market as a good thing, but this is a major mistake.
    Does it really create wealth?...very doubtful.
    But it certainly impoverishes the young.
    We all need to wake up to the fact that the property market needs regulating....fuses should be inbuilt that will blow when over-heating occurs.
    We all see the results of no control...both here and in the USA.

  • Comment number 75.

    Mortgage insurance as it stands is a scam.

    At the moment, the bank lends the money with no risk whatsoever, if I default, they claim their money back from the insurance company.

    The insurance company, to whom I have been paying hefty premiums, take over ownership of the property. They sell the property at a loss to the sum given to the bank and come after me for the balance.

    So why was I paying the premiums then ?
    I don't and can't in any way gain from the insurance cover that I'm paying for

    I should be paying premiums to cover me in the event that I default.
    Those premiums should be based on the risk of me defaulting and the potential difference between the outstanding debt and the recoverable asset value of the thing insured.

  • Comment number 76.

    I have every sympathy for the NR staff. NR shouldn't be in public ownership in the first place.

    However, as many comments have already pointed out, the Government is simply using NR to try to reinflate the housing market in a doomed attempt to stay in power.

    Having not admitted, even to themselves, that a major cause of the severity of the recession is the house-price bubble, the politicians are consequently entirely unable to come up with policies appropriate to the situation.

    Because we have experienced a house-price bubble, years of house-price falls are to be expected - as happened last time, and the time before that, and...

    Back in the early 1990s, after, like now, just a year or so of house-price falls, the Tories lured first-time buyers into the housing-market to try to save their own skin. I thought at the time that this was because of the evident lack of moral fibre on the part of Major and his notably invertebrate Chancellor, the entirely unlamented Norman Lamont.

    To see a Labour Government going even further than their predecessors and actually using public money to encourage young couples to buy a millstone of their very own is disappointing. Very disappointing.

  • Comment number 77.


    Risk is an understatement. 90% loans will, according to every housing market prediction, produce negative equity within 12 months.

    Look at the US market which in some states has now dropped 50% or more, off its peak - down 38% in last 12 months. UK may well follow suit as the recrssion bites. Another 1m unemployed will see a flood of home sales and downsizing.

    If UK follows USA, the house price downward spiral may well steepen. Lending at anythiing more than 75% is sheer madness and a total risk of taxpayer money.

    And LDV? Since when have taxpayer PLC been proping up management buyouts. This is a foreign owned business venture. I regret the loss of jobs, but since they were created at a time of reckless credit, who says the company would survive anyhow?

    However, the election looms, so who cares about anything but garnering votes.

  • Comment number 78.

    100% mortgages are ok when they are in line with true earnings. It may be stating the obvious but 100% of £200,000 is double 100% of £100,000. House prices need to reach a true level of economic reality to be affordable to first time buyers. Have we not grasped anything from the present mess. To be able to afford a reasonable deposit if needed prices need to come down..

  • Comment number 79.

    Prudent bank loans max 3.5 x salary. Slightly less prudent bank loans 3.6, gets more customers. Another bank loans 3.7, gets more customers.

    House prices rise. Buyers want more money, avoid original prudent bank.

    Prudent bank loses customers until it loosens lending policy.

    Competition will always create booms and busts, particularly in the housing industry.

  • Comment number 80.

    This is the only good news which has come out of the government for months.

    Unfortunately I'm fairly sure it is accidental rather than deliberate policy.

    It's perfectly clear that the banks are not competent to run a monetary system. I mean, would you allow a money lender to control the amount of money which exists?

  • Comment number 81.

    Northern Rock used to be a good old-fashioned solid regional building society, until the folly of privatisation and latter day management mistakes, so no wonder the justifiably proud people of the North East are supportive of it. You we're a brave man for going there - well done!
    The news of NR's ability to lend will be good news for SOME 1st time buyers, but not those frozen out by the crazy prices still being asked. I just hope that more funds being available does NOT result in higher prices. Personally I feel a return to 20% deposits as a minimum would be prudent, and house prices to stabilize at around 3x - 4x average household income in each locality would be morally and socially acceptable. So, more price deflation needed to remove housing from "speculation" to what it should be, housing for people!

  • Comment number 82.

    Hey come on guys get behind Gordon!!!!

    All we need to do is drive house prices back up, that will generate positive equity....

    ..... the banks can send us mailers telling how stupid we are to leave equity tied up in our houses.....

    We then borrow more and invest our "equity" in cars and holidays.....

    Bobs your mothers brother it's 2006 all over again and a run at the most sustained period of economic growth in recent history record ....

    What do we want?

    Unafordable houseing and massive debt!

    When do we want it?


    PS - don't you all remember, GB likes it when we run up 1 trilllion in debts directly with the banks (Keynesiasm by proxy)..... he doesn't like it when he has to be the middle man (Keynesiasm to fix Keynesiasm by proxy)......

  • Comment number 83.

    Lending needs to start.

    As a nationalised bank, Northen Rock could start the 'trend' the other banks will son get the message.

    We all know about responsible lending etc etc. We also all know prices are still to go down but buying a house is long term. It is the urge to move house every over year that bumps up prices etc

    We own a bank we should use it

  • Comment number 84.

    soon of course

    Let's try and find some positive in all of this

  • Comment number 85.

    I have to agree that a 90% mortgage involves some significant risk in the current environment. However, allowing house prices to fall further also involves a significant risk.

    The lending criteria and the price houses are not unrelated. To the extent that the continuing fall in house prices is due to reduced lending on the part of banks, reacting to this risk by reducing borrowing brings on the event that the banks are trying to protect against in the first place.

    We cannot eliminate risk so we have to manage it and a management strategy may well change over time. Currently, however, it would seem that we should err on the side of supporting house prices.

  • Comment number 86.


    100% MORTGAGES
    100% mortgage accounts are not just mortgage accounts but combined accounts.

    They bring "together" credit card and unsecured loans in an "all-in-one" account (also with deposits netted off).

    By bringing together all loan accounts the bank's security may be improved.

    For example, for a house worth £100,000 with a 90% mortgage of £90,000 and £10,000 of unsecured credit card and personal loan debts, the bank has better security if they are all in one secured 100% mortgage account.

    When mortgage terms come due for renewal, Northern Rock has been encouraging customers to go elsewhere. Those without arrears can move but those with arrears will have to stay.

    This means that the measure of customers in arrears as a percentage of the current portfolio is not a measure of the quality of the mortgages at the time the loans were made.

    So the current arrears ratios do not tell us whether any category of Northern Rock mortgages were better or worse than average.

  • Comment number 87.

    Robert, Did not the gov. hand northern rock back £3 billion when then claimed to have clawed back £16 billion in loans outstanding?

    I am sure it was reported in the broadsheets, furthermore I think (not as sure) that the gov. also handed back £3 billion last year when NR first reported on the initial success at repayments.

    If I am right then the taxpayer into NR for roughly the same £29 billion brown made us punt a year ago.

    Until we consistent net figures of what is going on why do the bankers and politicians think that we the public should believe in them or think they are competent?

    Until the public is treated as though it is adult and senient this fiasco will not be solved.

    It appears to me the US and UK need severe de-leveraging to occur and no-one is willing to articulate that 'hard love' message.

    The countries with surplus money balances are not going to want or be able to sove all the debtor nations problems.

    Financial protectionism is staring and the golden rule will win i.e. those with the gold will make the rules.

    And, oh, brown sold our gold right at the bottom of the market!

  • Comment number 88.

    How about a comment on the LDV situation asking for 40 million of my money. They will be asking Mandelson as the Business Secretary and guess who owns LDV. Our old friend Derapaska (Yatchgate). Deja Vu all over again!!

  • Comment number 89.

    I agree with post number 62 on the need to recognize the trade-offs that are involved in the exercise of government power. (My interpretation of this post.)

    In my working career whenever I raised the problem I was asked what my solution was. It is easy to criticize a solution because every action involves trade-offs all pluses and minuses and all the criticizers have to do is to point out the negative side of those trade-offs while leaving out the positives.

    Ideally, every criticism would be be accompanied by an alternative suggestion, scoped in sufficient detail to allow others to evaluate the trade-offs. Unfortunately members of the press are not in a position to do this, in part because of lack of knowledge and the pressure of deadlines. We cannot expect a journalist to evaluate options in the same depth as someone who does it for a living.

    Knowing this, we should give due consideration to the existence of trade-offs, even if we cannot fully evaluate them.

  • Comment number 90.

    It may be me, but we appear to be missing a significant point. We have moved on (a long way) from this being an issue with an absence of credit, to the classic recessionary position of fear. Fear, principally that one's income earning ability is under threat and the fundamental change that is likely to bring about. There is a large number of people for whom this has already happened, and therefore an exponentially growing number who now fear it may shortly happen to them

    In such circumstances, it seems utterly irrelevant that Northern Rock is to make additional funding available - no one in their right minds in current conditions is, or should be, thinking of increasing their exposure to debt.

  • Comment number 91.

    We are about to become, if we not already, the laughing stock of the developed world. There is a Global recession which in some part is the result of an unregulated financial industry and an over heated housing market both here and in the US. So what is our latest big idea to help our economy come to terms with the current situation? We kick start the housing market by pumping cheap credit back into an under regulated financial industry so that they will ease the requirements for issuing mortgages. Hence try and re-inflate the hosing market bubble. Is this not how it all started a few years back. I thought we had learned our lesson that there is no such thing as cheap credit. Apparently not! I thought we had learned that this type of banking model does not work. Apparently not! I thought we had leaned that an overheated housing market can not be sustained. Apparently not! I just can’t wait for the next big thing!!!!!!!!!!

  • Comment number 92.

    Hang on. Didn't Alistair Darling say he didn't want to nationalise any more banks because they were 'better run in the private sector'? So how come a nationalised bank is doing so well they can re-enter the mortgage market and deserve billions more in government funding for loans? We can't believe what they say from one day to the next at the moment.

  • Comment number 93.

    Well with both Springsteen and Blur playing Glastonbury this year, I'd say a Rock Revival was still in the balance.

  • Comment number 94.

    Negative sentiment is more of the problem than no lending - no sensible person should buy anything other than their own house when the market is falling - as the 'bubble' was at least partly blown up by investors, either buy to let or holiday homes, then logically house prices will continue to fall.

    IMO this is a good thing - houses should be for people to live in & they should be at a price that people can afford - legislation should be brought in to stop people owning a second UK property without good reason and certainly no more than two should be owned.

    This would keep property prices down to the correct level to match peoples livelihoods, particularly in places like the Lake District where the people who work there generally can't afford to buy or even rent because the prices have been grossly inflated by the 'holiday home' market - its just wrong.

    Finally a quick word about yesterdays malus v bonus blog. Any annual bonus system based on a base that is revised annually will create the wrong type of performance behaviour. eg Year 1 fantastic performance large bonus, year 2 hard to improve so little bonus, year 3 hard to improve so still little bonus OR year 1 fantastic performance large bonus, year 2 terrible performance = no bonus but makes it easy for year 3 fantastic performance large bonus.

    I guess this is how fund managers bonuses are calculated - crazy. It would not be workable to pay bonuses and then take malus off people but a deferred bonus payment including malus adjustment would work perfectly. A good thought provoking blog from RP.

  • Comment number 95.

    So for political reasons, a company already in financial jeopardy is going to offer a product it knows may not only ruin the individuals who use it, but the company itself.

    I love this government, anyone who takes out a 90% mortgage in the current climate is a fool, and any company that offers one deserves to go bust, but hey im sure the tax payers will cover any liabilities in the end .

    I do so enjoy underwriting the Labour parties election campaign.

  • Comment number 96.

    I don’t see why the LTV issue is necessarily a problem as long as the borrower is prudent with their finances. I took out a 95% mortgage with Northern Rock about 4 years ago. I immediately chose to make overpayments of £100 a month over and above what I was required to pay in order to bring down the loan quicker over the longer term. I now have just under £9000 in overpayments to draw down upon on my mortgage alone should I ever need to should my financial circumstances take a turn for the worst.

    It’s not the case that everyone who takes out a 95%-100% mortgage is some sort of debt-crazed irresponsible maniac, hell bent on defaulting on their loan. The so called affordability of mortgages problem is largely fiction. Many people can service a loan such as this quite easily. What’s needed is a step change in many people’s views about the quality of life they seem to think they are entitled to. You don’t HAVE to buy a new car, you don’t HAVE to go on expensive holidays, you don’t HAVE to buy designer clothes and handbags, you don’t HAVE to spend half the weekend in the pub paying £3-4 a pint. When a few more people learn to accept this you’ll see a few more people suddenly being able to service their mortgages quite easily

  • Comment number 97.

    i cant believe northern rock shareholders will get next to nothing compensation when so much is happnning with the business why cant they keep thier shares until it goes onto the private sector ....the government have got alot too answer for stitching up normal working class people
    i wont be voting for this sorry lot

  • Comment number 98.

    Can't say how angry I am at this - the Government is using tax payers money to re-inflate the housing bubble! As someone who has saved for several years and waited for the housing market to calm down before buying a home, I can't express how angry I am that the govermnent is YET AGAIN screwing me over - with my own tax receipts!!!!!

  • Comment number 99.

    This probably sums the entire situation up percfectly:

  • Comment number 100.

    so let's get this right........

    for the good of the UK I should immediately go out and get:

    a high LTV mortgage (one former owner from Newcastle who only crashed it once)

    low LDV van (one former owner from Russia who only crashed it once)

    bucket of KFC (Gordon Brown's secret recipe)

    economic crisis over! that's finger lickin good

    PS: I see that another pirate has joined the good ship NUMPTY today to sail under the flag of Cap'n Doom'n'gloom Peston; welcome aboard me hearty


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