True, but theres nothing wrong with owing 95% or even 100% as long as you can afford to repay it, and thats the real problem. Whether its banks or the tax payer thats lending the money, the people borrowing it need to be checked to make sure they are capable of the repayments, which wasn't always the case before.
Its important because without schemes like this, the housing market stalls and its unreasonable to expect a young adult to save £25000 for a deposit, even more so if they are repaying student loans, etc, unless of course we have a massive collapse in the housing market to make them more affordable.
I think growth in the housing market is important though. Not only do house builders benefit, but there are the associated trades....gardeners, decorators, furniture sales, carpet suppliers, removal firms, etc, etc, and of course ME. Add to that, the fact that people use their property as part of the pension plans, or they buy and let second properties because they don't want a pension fund. So much of the economy is linked to the housing market, so a collapse would be a disaster.
But yes, the whole credit crunch started with poor control of mortgages in the US, so needs to be avoided. (Though as a sole trader who previously self-certified his mortgage, it makes it more difficult for me.)
