28th July ‘08 - Mortgage Lenders to Seek Secured Loans
The government is expected to come under pressure from mortgage lenders to relieve pressure in the market and allow for renewed growth when a key report is delivered next Tuesday.
Ironically, one of the proposals being mooted by the Council of Mortgage Lenders (CML) is for the Bank of England to give lenders a kind of secured loan that would enable them to release much needed funds for new customers.
The secured loan idea is seen by many as a vital tool in injecting new life into a declining sector. Just this week statistics released by the British Bankers Association revealed that just 21,184 new mortgages were processed last month, a fall of 67% on the same month in 2007 and the largest decline on record.
However, it is no certainty that the government will give its assent to the secured loans idea, with a spokesperson from the Treasury commenting, “We are considering different options at the moment but we have not made any decisions and we are not at the stage of making decisions.”
In the meantime, house prices continue to fall with no sign of the trend being arrested.