It is good to see Vince and his team leading the way on housing finances. People have been led up the Government cloud cuckoo path of economics of borrowing as though there was no tomorrow and now it is collapsing. It will be ordinary families that suffer from Gordon Brown’s calamitous stewardship of our economy.

Great YouTube comment here

As repossessions increase – and isn’t it a disgrace that Northern Rock is charging to front of eviction alley – it will be local government that is expected to pick up the pieces and support these families in distress. These will also result in bankruptcies and other business loosing out on outstanding loans.

Two key points are:

Keeping people in their homes, so you don’t need to fear unfair repossessions

We must ensure that banks only ever repossess people’s homes as a last resort. Liberal Democrats will instruct the courts to make sure banks don’t repossess unless they’ve already offered free independent financial advice, and pursued all alternatives like renegotiating the terms of the mortgage and offering a shared equity agreement.

We already have nearly two million families on housing waiting lists. We can help those families and prevent a homelessness crisis by allowing councils and housing associations to buy up unsold properties and land from building companies. This will replenish our social housing stock, stimulate the house building industry and provide homes now for people who need them.

Lower mortgage payments and cheaper business loans through big interest rate cuts

People and businesses need help paying off their mortgages and loans, so we need substantially lower interest rates. The UK still has higher official interest rates than the EU (4.5% compared to 3.75%) and dramatically higher rates than the US (1.5%). This makes it much harder for people to pay their mortgages, makes it harder for business to survive and slows the economy down. The Bank of England must remain independent, but at this time of emergency its remit must be changed to make interest rates fall dramatically and swiftly. This should be part of international action to cut rates across all major economies.