Mortgage move

AS families continue to resent those “nanny state” politicians who tell them how to run their lives, it might appear curious that UK Asset Resolution – the firm heading Britain’s “bad banks” – should be preparing to telephone 30,000 mortgage holders to offer some harsh financial advice.

However, given that the individuals concerned are believed to be overspending and could go into mortgage arrears when interest rates start to rise again, as they will do next year, it is, perhaps, a sound move on the UKAR’s part.

After all, the breakdown in the relationship between banks and their customers – whether they be individuals or families – was a contributory factor in the recession. And, just as the financial sector over-extended itself, so, too, did those families who assumed, wrongly, that the good times were here to stay.

That the UKAR is taking this bold step offers further evidence that some individuals have, for whatever reason, not curbed their excessive spending, and that the country’s road back to financial prosperity will not be smooth.

It also highlights the acute dilemma that confronts David Cameron as he returns to Downing Street following his short family holiday in Cornwall.

While the banks are urging consumers to curtail their spending, the Prime Minister actually wants people to spend any disposable income to help shore up the retail and leisure industries.

And, while many people are struggling to maintain their existing mortgage repayments, there are new fears today that Britain’s housing crisis will become even more acute because of a dire shortage of affordable housing.

In short, this is another warning to Mr Cameron that he is going to have to work morning, noon and night to provide the economic stability that is still required to underpin the recovery.