Talking down the risk and upping the LTVs

Northern Rock are back in the game. The state-owned bank will again offer 90 percent mortgages. Andy Tate - Northern Rock Director - summed up the new sales strategy:

"Our new products, which will be offered within our prudent risk appetite and only to customers with good affordability, should appeal to those who have lower deposits and first time buyers."

Don't you just love the linguistics of financial irresponsibility; "prudent risk appetite" and "good affordability". Today's announcement is part of a process. Shortly, we will see another announcement where Northern Rock will be offering 95 percent mortgages, again using weasel words like prudent and affordable to justify the slide in lending standards.

The sad truth is that we have learnt very little from the collapse of Northern Rock. There are far too many people who want the bubble back.