100% loans ‘to blame for housing crisis’

THE introduction of 100% mortgages by banks and building societies has played an important role in creating the current housing crisis, a leading homeless campaigner has claimed.

The chairman of the Affordable Homes Partnership and former trade unionist Des Geraghty yesterday criticised financial institutions for fuelling inflationary house prices beyond “prudent levels” by making 100% mortgages available to young homeowners.

Mr Geraghty said such borrowers were also the most vulnerable to the risk of negative equity if there was any further downturn in the property market.