Countrywide, the UK’s largest chain of estate agents and mortgage brokers, has repeated its call for compulsory lending targets.
Financial services director Nigel Stockton was speaking after the Bank of England’s decision to pump £80bn into banks on the condition that they passed the money on in the form of affordable mortgages and business loans. The loans, one of two liquidity schemes announced last week, could start to be released within days.
Stockton said the injection of money was very welcome but cautioned: “I will only start putting the bunting back out when I have seen how this is to be deployed.
“We have been on record for some time now calling for the introduction of mortgage lending targets which would benefit both the housing market and the UK economy.
“The market needs specific mortgage lending targets and increased gross lending targets. Without these targets, there is a real danger that this money will again be used by the banks for balance sheet management and not to increase mortgage lending.”
Estate agent Brendan Cox, managing director of Waterfords, which has branches in Surrey, Berkshire and Hampshire, said the money would only be useful if the banks loosened their lending criteria.
He said: “The success of this measure will be dependent on how it is governed and what stipulations are put in place to avoid the banking hurdles that house buyers have experienced over the past four years.
“It is encouraging that the Government is recognising that previous initiatives have had little impact, particularly when it comes to the housing market, but it is not just a case of providing more money: it is the criteria laid down as to whether or not someone qualifies for a mortgage that needs to be adjusted.
“While banks may now have more freedom to lend, if these measures are to have any real effect, they need to be made available to those with a 10% deposit.
“The acid test will be if, as a result of this extra funding, people’s desire to buy and sell property returns.”
Housing commentator Henry Pryor said he thought lenders would relax their demands for high deposits, and predicted more 90% mortgages. He said that as a result, more buyers would be competing for the limited stock on the market and house prices would rise.
He said: “Whilst prices in some areas are now down by more than 10% over the last 12 months, this dramatic move will add as much as 3% to average house prices across the country.”
Comments
lol
imagine the judge 'mr smith,you stand accused of a crime so dreadfull that you put the whole uk economy at risk
for the crime of saving money(including some CASH) I sentence you to 2 years in jail,saving jobs of prison officers and social/probation/therapist'
you went off the rails and these are the consequences'
take him down
I have an idea why doesnt the motor industry call on it to be compulsory to lend for cars etc etc. Next they will be calling for it to be compulsory to borrow
@pinky
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it is very inportant that we get the banks lending and processing mortgage applications quickly not sitting on them which most of them are doing at present.
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lending at historically high houseprices and historically low interest rates?
its the economics of madness
"BoE's £80bn plan given cautious welcome by housing market"
So the "housing market" is now an independent, thinking entity, able to express and communicate it's own feelings and emotions?
This 'compulsory' lending ... is it to be based on 'compulsory' saving. Last time I looked for a bank to lend money someone had to save money - even with the conjuring trick that is fractional reserve banking.
With lots of cash entering the housing market as saving rates are so low, where is all this money to lend going to come from.
The way estate agents talk you'd think we hadn't had a credit crunch, that banks were not already massively exposed to the housing market, that capital ratios were already more than adequate and that it was just bankers being awkward that stops them from lending (all the moneh that does not exist).
Very few people seem to have grasped what is actually going on.
EAT news story. Friday 15th June 2012
"Chancellor acts after lending to first-time buyers plummets 70%"
"The Bank of England will pump around £140bn into the banks, on the condition that they pass it on directly in the form of cheaper mortgages and business loans."
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EAT news story. Monday 18th June 2012
"BoE's £80bn plan given cautious welcome by housing market."
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Come on people at EAT.
Please look into facts please, ask questions, report answers, and stop the sensationalism.
it is very inportant that we get the banks lending and processing mortgage applications quickly not sitting on them which most of them are doing at present.