Should the UK government take mortgages of the banks hand in the hope of putting confidants to the housing?

Question

Market. (Nationalising dodgy debt). And would this create a run on the pound.

Answer 1

No.  This is simply a correction in house prices, which have been rising too much and too fast in recent years.  The govt. should not spend any more tax payers money "saving" banks.

Answer 2

what a horrible idea, we'd only up end up paying with a loss in the pound, ugh. Confidence will be restored just as soon as they sort out the interest rates, and regulate and protect people from losing there homes so quickly. The prime EP fiasco was a nightmare, Banks should be more closely regulated to prevent this happening again.

Answer 3

My mortgage is doing alright where it is thank you very much, and the last people I would want having anything to do with it is this incompetent government...they have well and truly proved that they couldn't even organise a p*ss up in a brewery!

Answer 4

No.  It would cause a run up in home prices and increase inflation.  If the government agrees to cover the bank's debt obligations, this removes their down side risk of making loans.  As a result, the banks will immediately start making more loans, most of which will be 'dodgy'.  

The new money will drive up home prices as an increased supply of money chases a fixed amount of houses.  Eventually, the risky buyers will become overextended and not be able to make their payments.   That's the situation we're in now.  Why would you want to repeat it?