Boulger backs 100pc mortgages
In future Boulger thinks more people will be renting into retirement, which will cost the economy long-term as retirees will have to apply for housing benefit.
As such he thinks making finance more available now will allow many of those who are forced to rent to buy.
Boulger said: “Frankly I don’t see 100% mortgages as a bad thing as long as they’re affordable.
“The ideal scenario is not to have to borrow 100% but it’s better than an unaffordble 50% mortgage.
“There are plenty of people out there who are renting or paying £1,000 or month who could afford a mortgage but can’t afford the deposit and Stamp Duty.”
He added: “The credit crunch was not caused by people taking out 100% mortgages; it was caused by other factors.
“If you can facilitate people buying property as opposed to renting, that in itself doesn’t increase the demand for property.”
In order to help people get on the housing ladder Boulger also targets innovation in the market for retirees so they can help out their children and grandchildren.
He added that this is becoming more important due to the growing price gap between high and low LTV mortgages.
He said: “A lot of retired people who are homeowners with no mortgage on their property have equity in the property well into six figures which they would be quite happy to use to help their children or grandchildren buy a property.
“If somebody wants to raise a relatively low loan to value loan on their property the risk to the lender is nil, but the issue is affordability.
“They could take out a lifetime mortgage but they would be paying 5.5% or 6%. This is clearly expensive in the current environment.”
“They are underwritten on the fact that the interest rolls up and they price for it having a no negative equity guarantee.”
He added: “It’s ridiculous that lenders look at income in isolation and don’t take into account other assets.
“Because of the way MMR is set out that is a problem.”