News that Northern Rock is to start to offer mortgages again is welcome. In reality, the government's decision to run down its mortgage book was a serious mistake, and contributed to our problems today.rnWith the Council of Mortgage Lenders saying mortgage lending this year could be negative, even a sum as small as Northern Rock's ￡14bnrnover two years, could be a lifeline. First-time buyers and shared equity purchasers have been worst hit by the famine and Gordon Brown must not mislead us into believing that all 95%, or even 100%, mortgages are a bad thing. These parts of the market simply won't function without them. But a taxpayer-backed lender can be cleverer about how to manage this lending. In particular, it should turnrnmortgages into tenancies if, for example, redundancy makes full repayment impossible, with the option of returning to ownership in better times.rnBut it will require far more than this to get the market moving. The government accepted the Crosby report's recommendations of guarantees for banks raising funds for mortgages, but we cannot wait until the Budget for action. Another package is rumoured to be pending. Unless it comes soon there is little likelihood of lending picking up this year. That could be the last straw for many builders.
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