Another day, another desperate throw of the dice (34)

The government's attempts to force banks to continue lending into a falling housing market to keep the bubble inflated, by nationalising and bullying RBS and Lloyds, doesn't really seem to have worked, so they're now going to try an even more direct approach.

From The Daily Mail:

Post Offices will start offering controversial 'super-size' mortgages to help young people with little savings buy their first home, the Government will reveal today.

Under the radical plan, Britain's struggling network will hand out mortgages to people who can only afford a 10 per cent deposit. It raises fears that they will be left exposed to a negative equity nightmare if house prices fall sharply over the next few years, as some economists predict...

... under the new plans, millions of people who have not visited, or rarely visit, their Post Office will be encouraged to return by a new range of products. The radical shake-up will include a proposal to force Britain's banks to pay a new 'community levy'... The money will be used to help the Post Office and credit unions to hand out cheaper loans to people, who would typically be targeted by loan sharks...

The decision to offer 'super-size' mortgages comes just days after the Chancellor scrapped stamp duty on homes bought for up to £250,000 for first-time buyers until March 2012. For many young people, they feared they could not take advantage of the tax break because few banks would give them a mortgage.

The number of 'super-size' loans has collapsed since the credit crunch. In August 2007, there were 829 loans for those with a deposit of only 10 per cent. Today there are just 154.