Guarantee scheme to drive lending
The Treasury is to offer securities to banks and building societies in an effort to revitalise the mortgage market.
Under a deal unveiled in the Budget the government will give guarantees to lenders to back mortgages to residential customers.
The scheme is similar to the Credit Guarantee Scheme, which was launched last October, but extends the government guarantees to residential loans.
Michael Coogan, director general of the Council of Mortgage Lenders, said: ‘The most important element of this Budget for the mortgage market over the long term may prove to be the new asset backed securities guarantee scheme.
‘This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit.’
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Readers' comments (1)
Harry Lime | 23/04/2009 8:54 am
Why don't the govt make more of an effort to get banks and building societies (pref through Northern Rock and therefore effectively the govt) to lend to the housing sector at a decent rate of interest. All the Associations we deal with are terrified of going back to the market because of the rates required and all banks want to refinance all outstanding debt that they already have on good terms. because the HA's don't want to get lending at these terms they have less to put into schemes and as such are requiring much higher grants from the HCA so the govt ar paying one way or another.......
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