CML seeking clarification on Treasury statement

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Monday, 13, Oct 2008 12:00

The statement issued today by the Treasury on the commitments that it is seeking from banks supported by the recapitalisation scheme included a reference to "maintaining, over the next three years, the availability and active marketing of competitively-priced lending to homeowners and to small businesses at 2007 levels" and "support for schemes to help people struggling with mortgage payments to stay in their homes, and to support the expansion of financial capability initiatives".

The CML doubts whether, in the current market where house prices have been falling and demand has reduced, it would be either prudent or desirable for the volume of lending to home-owners to equate to 2007 levels. The CML assumes that the reference is a more generic aspiration to achieving a broad, deep mortgage market in general with a good spread of products enabling access to the mortgage market for all credit-worthy borrowers - and this would be an aspiration that the CML wholeheartedly supports.

The CML is also actively supporting the development of schemes to keep people in their homes, notably through a mortgage rescue scheme to be delivered through housing associations. Several secondees from lenders, co-ordinated through the CML, are helping the Communities and Local Government Department with its implementation plans for the scheme.

CML director general Michael Coogan observed:

"Lenders have been working hard to continue to deliver a flow of competitive mortgages into the market, as well as to ensure that as many people as possible are able to keep their homes if they suffer temporary financial difficulties. These efforts will continue, and we look forward to working closely with Government to help deliver these objectives."

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 11.74 million mortgages in the UK, with loans worth over £1.2 trillion

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