My first reaction was if that was the best idea he can come up with then we are all up the proverbial creek without a you know what. In reverting back to an oft tried and never achieved call for 30 year mortgages we suddenly saw that actually, no one in power at least, seems to really get the issues.

Alastair Darling said much the same thing in 2007 and was duly obliged by a couple of lenders offering 25 year fixes at the 6.39% level. Of course there was not much take up due to the onerous penalties in the first 10 years and the additional cost, but for those that did, well it’s looking a tad expensive now.

But still, Grant Shapps said to the Building Societies Association that “Longer-term mortgages – possibly as long as 30 years – could help families on tight budgets know exactly where they stand when they are buying a home, by giving them greater certainty over how much they will be paying for their home in years to come.”

As with any advice, the problem is that for most real clients, a 30 year fix is probably not the best advice. Budgeting is all very well, but as those tied in to the previous offerings will no doubt tell you, it sometimes isn’t all it’s cracked up to be.

In today’s ever-changing times with a transient work-force, births, divorces and the like, some kind of flexibility is required and having a long-term fix with expensive tie-ins means that those who are looking to move are tied to the lender they took the product with. This may not be the best lender when they need to move or borrow more.

Mr Shapps also suggested that to get over the redemption penalty issue, lenders should cost them in to the interest rate. Ok in theory, but in practice this just makes the differential more expensive. Just a quick glance at 10 year fixes available at present, (and there are only 4 lenders I can see offering 7 such products), there is only one Skipton, who offers this at 85% LTV at a rate of 5.85%. Penalties are a massive 6% in the first 5 years.

The challenge for lenders, as always, would be to produce a cost-effective very long term fixed rate, with flexibility built in. Then you may see demand for such products rise, although not by a great deal.

So when you actually sit in front of a client and explain the pros and cons then go through the cost differentials, the majority, although not all, will opt for a cheaper and less onerous 5 year product.

My final question is what exactly, by calling for the introduction of such products, does Mr Shapps hope to actually achieve? It will not cure the issues we have in the property markets; it will not mean more homes are being built; it will not help a workforce that may need to move to where the jobs are and it most definitely help increase flexibility to deal with whatever life throws at you.

If anything it could stagnate the market further and mean that those who are on a tight budget end up paying more than they actually need to.

Whilst a healthy market undoubtedly needs a good mix of products to cater for every aspect of personal choice, there are surely more important matters to be concentrating on. Overhauling Stamp Duty, for example, would be a much better place to start.

First tried back in 1961 as an “experiment” whose results are still disputed, this involves the Fed selling short-term bonds and, here’s the twist, replacing them with longer term ones. The result is that as more long-term bonds are purchased interest rates should fall, (it’s a supply and demand thing, sort of).

So whilst the US relies on Chubby Checker to help lift them clear of another dip into recessionary squalor, the question is what affect will it have on us? The markets seem initially to be unconvinced, as whilst the yields of 10 year bonds will fall, recent studies suggest that last time the actual effect on mortgage rates and actual borrowing costs was negligible and, let’s face it, interest rates are already very low, so our problems run deeper.

The key to this policy is that no new money is put into the system, so it is crucially different to Quantitative Easing. If SWAP rates do fall accordingly as a reaction to this then great, but will this actually stimulate more lending to individuals and businesses?

Back at home the Bank of England’s MPC, now all firmly singing from the same hymn sheet, are contemplating a new round of QE themselves to help stimulate things, with November the favoured date for another £50 billion or so.

As far as the beleaguered UK housing market is concerned there are deeper issues still and we need some radical thinking and one or two experiments of our own.

Housing policy needs a radical overall, builders need to be supported, a North-South divide is getting more and more pronounced and the social issues that arise with a population unable to move are far reaching. Local Authorities are struggling to meet their social housing allocations and homelessness continues to grow, which is shameful in this day and age. Housing is in danger of being the preserve of the well off or the fortunate.

The strange thing about our industry, however, and one that is contradictory is that it feels better. Is that just because broker numbers have fallen so dramatically that there is more to go round? Most brokers I speak to say that things have picked up – is that just a London thing?

One pleasing aspect for us brokers is not just the fact that lenders are now tapping us on the shoulders and asking for more business but the return of the smaller building societies who, not able to just compete on price, are looking for new ways to lend again.

These lenders are able to eschew the frustrating tick box mentality of those banks who claim to offer the very best rates, (the reality being that clients are victims of the long, drawn out, “Yes, Yes, er No” approach), and instead offer the ability to discuss trickier cases with a real decision maker on day one.

If the property market is to kick forward once more, then this lending is essential in the new world where credit and risk rules the roost.

Whilst the threat to all of us is a second retreat by lenders triggered by, for example, a further disintegration in Europe or the mighty US twisting too far we all end up shouting, we need to make sure that as an industry we are heard louder than ever.

We need new ideas and some radical thinking to meet the challenges we face.

It’s enough to leave us all thinking that anything else is a little mundane, however it is far from it. If anything it tells us to make the most of everyday life, to worry only about the things we can control, to rejoice in the mundane and make it as fun and worthwhile as we possibly can.

One of those mundane things is the UK property market. It seems that this will be flat for a while, with only growing regional differences to write about as London continues to exist within its’ own bubble.

But we have to deal with what we are faced by and whilst it may seem tough, there are always positives. With funding rates at an all time low there is an opportunity for many to finally make that move or to remortgage to protect themselves against the future.
Being able to borrow at just 1.90% would have seemed laughable a few years ago, whilst being able to fix for 2 years at just 2.49%, 3 years at 3.15% or 5 years at 3.64% a mere pipe dream.

With the unpredictable nature of things we also need to ensure that we all do all we can to protect ourselves. With fixed rates at an all time low, those of us who are more sensitive to future rate rises can act to secure payments. Those that have put off taking out the essential protection policies to ensure financial security should life take a nasty turn, well now is a good time to look into it again.

It never ceases to amaze me how many leave themselves and their families open to potential hardship by refusing to find the extra few quid it would take to secure their futures. After all, this is cash that is probably spent in the pub, or over a nice meal each month without thinking. Many of us spend more a month on coffee, (he says staring at a Starbucks cup), than we do on insurances that could literally save our home.

Whatever else is happening in the world, UK lenders seem hungry again for action and we should all be making the most of this. After all, there is not much point in us all going Back To Black.

RIP Amy.

However, this week sees the release of a major report involving the “stress-testing” on a range of European Banks to determine their health and, perhaps more importantly, whether they are in a position to cope if anything goes seriously wrong again. These “detailed” tests have been undertaken on 91 banks, including names such as Deutsche Bank and Commerzbank in Germany, HSBC and Barclays in the UK, as well as Societe Generale and BNP Paribas in France.

The worry is that if this is negative we could slip into a second credit crunch. The other worry, as some news has been leaking that certain lenders have walked through these tests, is that they have become a bit of a shambles and cannot be trusted. In other words, if no one believes the results, is this just as bad as a negative result?

Under this shadow, the Bank of England are trying to deal with some contradicting factors; on the one hand the recovery looks like it is petering out, the budgetary cuts are due to bite in the near future and they are even considering boosting their Quantitative Easing policy, on the other hand inflation is still proving sticky and one Monetary Policy Committee member, Andrew Sentance, voted for the second month running for an early hike in interest rates.

Economist Ray Barrell, of the National Institute of Economic and Social Research, told the Times that putting QE back onto the table indicated the MPC were worried about the results of this Stress Test report. He said, “we are sitting on the edge of a volcano and we won’t know until Friday whether it will erupt or not”.

It is sobering stuff, but without trying to be too pessimistic it does seem as if we may have already seen the best part of the year in the mortgage market.

However, too many people like to dwell on the negative, bad news sells don’t you know, and whilst we are all under no illusions that we are still not out of this crises, things may not actually be that bad and will begin to even out.

The reality is probably that the Stress Tests will not actually be too worrying and will have been done to ensure that most banks, but by no means all, pass through safely. So maybe a little rigged then, as my learned colleague Rob Gill says, “I can’t believe even the EU would be so daft as to order a series of tests which could spark a second, European orientated banking crises, cost billions upon billions or Euros to sort out and potentially tear apart the Euro zone.”

What is more, there is of course a positive side to falling house prices and more properties on the market meaning that more people may be tempted back to the market in due course. Mortgage rates are still low, lenders still ultimately need to lend and people still need to move and desire to own their own home.

What is more, people still have a mistrust of banks and there is an increasing demand for independent advice that is unlikely to diminish.

As with everything, sentiment is of paramount importance and if you choose to just concentrate on the negative then do not be surprised when negative things happen. It is much better to be aware of the issues; it is dangerous to be naive, but to concentrate on the positives.

Last word to Rob for another very valid point, “The big risk at the moment is the US talking themselves into a double dip, and they really are talking their way into it rather than there being any underlying causes.”

As individuals, as an industry, as an economy and as a country we should be careful not to do the same.

Whilst Brown did not do as badly as polls predicted a month ago it was very clear that he has not been given a mandate to govern. Nick Clegg admitted it was a disappointing night as many who said they would vote Lib. Dem. did not have the courage of their convictions when it counted most. However, with 23% of the vote equating to just 50 odd seats, the issues of the electoral system are glaringly obvious.

Potentially the most disappointed, however, must have been Cameron. This really should have been his election on the back of horrendous crises, Labour gaffes and the most unpopular unelected Prime Minister for many a year.

The fact that they did not walk in says two things. One that Cameron has failed to convince many, or at least many in his team have not come up to scratch, and second, that people do actually want change, but electoral change rather than just the traditional switch from red to blue.

So, as predicted, we find ourselves in Hung Parliament territory, but what does this mean for interest rates?

There have been plenty of scare stories about the perils of a hung parliament, spread mainly by those with political motives. There is, however, no doubt that whilst some other countries do not seem to have an issue working within a balanced parliament, the UK’s previous experience has not been exactly plain sailing.

What is absolutely clear is that the leading politicians now have a grave responsibility. If they cannot put at least some of their differences aside and resort to the Punch & Judy politics that the country has so clearly railed against then we could have issues.

On the face of it, the city reacts very quickly to news such as this and the hung parliament scenario has been expected for many weeks now, so much of the initial “costs” as far as interest rates are concerned have already been price in.

Bond yields may be a little volatile in the short-term, but this has all been expected and they should settle down quickly.

One interesting little point is that actually the Euro problems are working in the UK’s favour! For all our issues we are not Greece. The UK is traditionally stable and even with a Hung Parliament those who need to invest in European bonds, who do not want to take a risk on a Euro denominated region are looking at sterling bonds. This can actually counteract our own issues and have a stabilising effect. Simplistic perhaps, but you get the point.

If a relatively stable coalition is established and work begins in earnest then there is no reason for rates to jump. In fact, a coalition that actively takes the best from each party and works for the good of the country could have a dramatically calming effect.

There are many who are however, sceptical that such a scenario can be achieved. The city hates the uncertainty that weeks of haggling would cause and this could well lead to two worrying scenarios.

Firstly, investors may continue to lose confidence in sterling which if continues too far may mean that interest rates need to be raised in order to defend Sterling. Secondly, the threat of credit rating agencies seeing no particular plan to cut our deficit quick enough could well lead to the nightmare scenario of a loss of our AAA rating, which could also lead to a rise in interest rates.

In fact any prolonged indecision could lead to a number of outcomes and until we see some of the dust settling we could well see mortgage rates start to rise, reflected initially in fixed rate pricing.

However, at the time of writing Mr Clegg has just come out and stated that he would stick to his word and give first option to those who have won the most votes which more than hints at a Conservative / Liberal Pact.

There is a very big question mark over this however, as undoubtedly the Liberals have more common ground with Labour and I would be very surprised if the Conservatives sign away the political system to Proportional Representation. Although Cameron as PM, Clegg Deputy and Cable as Chancellor may appeal to many!

The funny thing is this is actually what many people I have spoken to actually wanted. Parties being forced to communicate and work together for the good of the country. Yes it may be idealistic and yes we may have another election within the next 12 months, but this election shows clearly that the public want a change from the system that has protected the status quo of 2 party politics for too long.

If Mr Clegg does not get what he wants from the Tories, he may well revert to Labour although whether he will work with Gordon Brown looks extremely doubtful.

In summary, it does seem that there is no reason to panic, at least not yet. What consumers should bear in mind however, is that we are closer than ever to the stage when interest rates will rise, whether quickly as a consequence of uncertainty and unrest, or slowly as a natural consequence of economic progression.

Either way, I do not expect that fixed rates will be as low as they are now towards the end of this year, so many people who are concerned about rising rates, who have “won” on a variable rate for the last year or so, are now thinking of quitting whilst they are ahead and opting for the sanctuary of a fixed rate.

The next few days will of course be crucial, but the leaders of the respective parties have an opportunity to act in the interests of the country and restore faith, or continue their stubborn ways and risk the wrath of voters for many years to come.