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Russia: Mortgage reforms set to bring market to life

The family's toilet seat hangs on a nail in the shared bathroom. The man in the big room at the end of the corridor is always drunk. No-one cleans the kitchen properly. And the baby next door always cries in the middle of the night. Tens of thousands of Russians still live in communal apartments (komunalka) in buildings confiscated from the rich and given to the workers immediately after the revolution. Entire families are crushed into each room, with six or seven families to an apartment. The irony is that some have decent jobs but are unable to borrow from a bank, so moving remains beyond their reach.

Reform of Russia's banking system is gathering pace. A deposit insurance scheme was put in place at the end of last year and attention has turned to mortgages. The days of the komunalka are numbered. The government launched a drive to create a working mortgage market last month that it hopes will make mortgages available to a third of the population by 2010.

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