crisis? what crisis?

[james armstrong]

copy letter to the new housing minister

Where others  see a crisis, I see an opportunity. 
If it costs £50billion to put things right, What is the best use for this money?
What is the 'thing' which needs to be put right?

I suggest even more important than bankers' and investors'  'confidence', the thing which has been going wrong for many years is out-of-reach house prices. The £50billion can be directed at permanently curing this problem.

Here's how.  
Yes, advance £50billion to the banks but rather than exchange it for  'commercial paper" exchange the cash for the  mortgaged title deeds which the banks now hold,  starting with the most secure first, not the most risky.  Every street trader knows it makes sense only  as a last resort to accept  the worst risks,(the so called 'sub prime' mortgages.)  
 
When , as expected,  hard up punters cannot meet their mortgage repaymants, 'repossess' the houses - and transform the terms of occupation into a tenancy, on the premise that interest-free rents are less onerous than capital plus interest repayments and are  easier to meet.

Repossessions are already taking place at an alarming rate and are the present and personal   concern of the most vulnerable victims, who are on the whole less worried about savers  and  the hardships of bankers. From personal  experience the trauma of being ejected from your house and home focusses the mind wonderfully. 

There will be less empty houses, less call on councils to rehouse and care for dispossesed families, less disruption to families, and less  temptation in future for banks to speculate on 'sub prime mortgages' and  less risk of such a crisis recurring. 

This government agency would in effect be using the savings of the affluent  to help fund the tenants on their books, which we could think of as a 'Mutual Society', and       
we  could  call the repossessed houses now owned by the government, "Council Houses." 

James A.