John Stewart (14 August, page 32) points out a couple of alleged errors in my column of 7 August.
I would be grateful if you would allow me to set the record straight.
My central point is that banks are lending off their own balance sheets at a rate only slightly lower than during the boom. Of the 800,000-odd mortgages agreed each year during 2006/07, only about 400,000 were funded by their own resources.
The current annualised rate of 350,000 is only slightly lower. The 60% drop to which Stewart refers is mostly owing to the closure of the securitisation market. Not only do banks no longer have access to wholesale finance, they cannot shift risk off their balance sheet to the buyers of securities, which during the boom allowed them to consider higher loan-to-value ratios or income multiples.
As regards home ownership, you are right in saying that some European countries have higher levels than the UK. But in almost every case their mortgage markets are much, much smaller.
In the UK, on the other hand, the ratio of mortgage debt to GDP is among the highest in the world.