Finger-pointing follows mortgage approval falls
Friday, 2 January 2009 12:00 AM
By Alex Stevenson
Opposition parties have called on the government to do more to help Britain's struggling property sector as new figures show further slips on mortgage approvals.
The Bank of England today revealed these fell to a nine-year low in November 2008, while the number of remortgages fell from 72,000 in October to 42,000.
Vince Cable, the Liberal Democrats' Treasury spokesperson, said the government was "paralysed" when it should be helping lenders and homeowners alike.
"The Liberal Democrats continue to believe that the urgent priority is to stop the complete collapse of the house building industry," he said.
"The government must take advantage of the slump in land prices to get housing associations and councils back into the business of commissioning new social housing."
The Bank of England's credit conditions survey shows lenders expect a further decline in the availability of mortgage lending - with banks over the last three months lowering loan-to-value (LTV) rates on mortgages tightening credit scoring criteria.
This fall in lending is being put down to expectations of further house price falls and concerns about the economy.
In these difficult conditions Mr Cable says a standardised mortgage with a market guarantee would be worth considering.
This would "help first-time buyers who can genuinely afford to take on home ownership", he suggested.
Shadow chancellor George Osborne sought to link the housing downturn to the government's wider performance, claiming they showed Gordon Brown's "recession policies are not working".
He said: "First we discovered that there were fewer shoppers in December despite the VAT cut, now we discover house prices are falling sharply and mortgage approvals at a record low despite the stamp duty holiday introduced three months ago.
"The new year shows that Gordon Brown's policies are not working and the recession is getting worse not better.
"That is because an economic recovery depends on confidence in the future, and people do not have that confidence while we have a Labour government in power bankrupting the country."
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