It looks like the slight pick up in the housing market has had a positive affect on the Good bank/Bad bank Northern Rock. After the EU announced the black and white bank had been a little grey when lending and split it in two last week, the housing market rise has helped Northern Rock reduce it’s overall number of repossessions.

Their figures were released today (Wednesday) and show a halving in the number of repossessed homes, bringing it down to 2000, compared to the same period last year. Whether the reduction is due to home-owners dodging foreclosure through a sell and rent back scheme or other form of quick house sale is unclear.

So, we’re told the economy’s on the up and the recession will be over by Christmas (sounds painfully familiar) and then everything can go back to normal, right? Well lets hope not for all our sake.

Do we really want banks and mortgage lenders giving out loans that cover the entire market value of a home and exceed annual income by as much as 5 times? In an ideal world, yes, but the UK (and global) economy cannot handle that kind of high-risk lending.

As a result of it; we all find ourselves with lower priced property and rising unemployment. But thankfully, one of the many QUANGO’s we’ve been hearing all about recently, the Financial Services Authority (FSA) have stepped up and accepted a lesson has been learnt.

It may be one of the taxpayers most expensive lessons on record but the FSA has set out plans to introduce affordability tests for borrowers and put a stop to mortgages without need for proof on income. This means the number of people wanting a quick house sale could rise as the number of mortgages given out may well drop and sellers could find it more tricky to find a buyer.