Council of Mortgage Lenders Budget response

Wednesday, 12 March 2008 12:00 AM

Responding to today's Budget announcements, the CML welcomes the announcements of further consultation on market-led solutions to strengthen the mortgage funding market, and hopes for early progress with active participation by the Bank of England. The CML is pleased that the Government did not commit to particular "gold standard" measures, that could have been damaging. The working group designed to bring forward proposals will report to the Chancellor in the summer with a view to proposals in the pre-Budget report.

It is a similar story of welcome measures but a lack of apparent urgency on sale-and-leaseback schemes, where the FSA and OFT have been tasked with undertaking a review of the operation of such schemes, but where there is no timescale for any measures to tighten up requirements on those operating in this sector.

And the modest announcements relating to shared equity schemes for key worker first-time buyers, while potentially welcome are unlikely to provide any short-term relief to affordability and entry costs for first-time buyers to the housing market, where a stamp duty reprieve would have done so.

Michael Coogan, CML director general, commented:

"There was little of immediate concrete substance for the housing or mortgage markets in this Budget. While there may prove to be benefits in the long term, the Chancellor ducked the pressing nature of some of the issues that are facing the markets right here and now.

"However, we welcome the recognition of the problems facing the mortgage-backed securities market, and the need for market-led solutions. We look forward to working with the Treasury to help ease mortgage funding pressures this year, and to look again at the ongoing market for low-cost home-ownership and long-term fixed rate mortgages for those niche groups of borrowers who would benefit from them."

NOTES TO EDITORS

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.8 million mortgages in the UK, with loans worth over £1.1 trillion.

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