Michael Bruce, the founder and CEO of Purplebricks, has said that he is concerned that lenders are returning to the pre-credit crunch days of granting mortgages that borrowers may not be able to repay.
Speaking to his Twitter followers in recent days Bruce has said:
“Warning signs are here. Reports in The Times and the Daily Mail reveal the return of massive home loans with some eye-watering sums being borrowed.
“YES, British people have powerful aspirations to own their own home, which is natural and a great thing. BUT, lenders need to be responsible about debt, especially when some are prepared to advance homebuyers SIX times their salary.”
And he added: “Of course it’s essential to the property market that there’s competitive mortgage lending. But we should also learn from the past and ensure people know what they can and cannot afford.”
There’s quite a difference, of course, between a mortgage market that is competitive and one that is irresponsible. However, the Building Societies Association recently suggested there is a case for reintroducing the 100% mortgages that were common before the credit crunch.