Our banks really need to start lending again
As we report in today's paper, a Central Bank report on bank lending has found that the banks are making it harder for people to get mortgages in the belief that house prices still have further to fall.
With the latest CSO figures showing that prices have already fallen by 47pc from their 2007 peak, this reluctance on the part of the banks to lend threatens to send house prices even lower and will offset any gains from the increase in mortgage interest relief for first-time buyers announced by the Government in last December's Budget.
Just as the banks helped to inflate the housing bubble, helping to raise prices to ridiculous levels by their irresponsible lending, they are now worsening the property crash by their refusal to lend in most cases. As the Central Bank report makes clear, whatever their public protestations, the banks simply aren't lending to most would-be purchasers. The old adage about a banker being someone who, after lending you an umbrella, asks for it back as soon as it begins to rain, springs to mind.