Shutting the stable door

When I was a law apprentice (yes, it was in those far-off, pre-traineeship days) there were pretty clear rules on how much you could borrow in order to buy a house. Something like two and a half times a couple's main salary plus one times the second.

And buying our first married home in the late 80s, it was much the same, if memory serves.

Somehow between then and the banking/credit crisis last year, the country - indeed the financial world internationally - allowed itself to believe that it was safe to allow people to borrow almost unlimited amounts, secured solely against the belief that property prices could only go ever higher.

Let's not blame the Americans for the fact that it all came unstuck.

Now we have the Financial Services Authority under Lord Turner belatedly recognising that it is time to return to something like common sense, with proposals to underpin banks' financial stability and -still under consideration but up for discussion - limits on loan-to-value and salary-multiple mortgage lending.

The report does point out that the people who will find such a regime most difficult (though I expect there will be a period of painful adjustment for many others) will be first time buyers, who at current house prices will find it difficult to raise the necessary deposit without family support.

There, it must be recognised, lies a problem, but it is in part at least one also caused by policy choices. Potential first time buyers are now also likely to be saddled by student debt and the need to invest more, and earlier, in securing pension provision in later life, so how are they ever going to afford to buy a house?

Maybe it means that house prices have some way to fall yet before reaching a level that the market can truly afford. Maybe it means that lenders and/or Government will have to be more imaginative, and ready to lend a hand, with different schemes to give genuine first timers a helping hand. It is less likely that it means it makes sense to go on allowing people to borrow high multiples of what are probably, these days, an uncertain level of earnings.

Whatever the way forward, it is time for a clearer focus on the bigger economic and social picture as we discuss what to do next.