CML director general Michael Coogan comments:
“Lending volumes do not seem likely to increase substantially towards the end of the year. Funding pressures on lenders remain, and the practical implications of government and public spending cuts are beginning to emerge, with a resulting impact on consumer confidence.
“Despite the pressures on government finances, today’s comprehensive spending review is no time to make further cuts in state support for borrowers in difficulty. A concerted effort by borrowers, lenders, the government and money advice agencies has helped to keep mortgage arrears and possessions in check during the current economic downturn. These support measures help contain the wider costs of homelessness, and deliver wider benefits to the government. Now is not the time to weaken the existing safety net.”
At the same time the CML welcomed the extension of the temporary concession on support for mortgage interest announced under the government’s comprehensive spending review.
The £200,000 limit on mortgage size and the 13 week waiting period (down from 39 weeks) will now remain in place until January 2012. The CML trusts that the government will review the housing market conditions before that point and decide on whether further continuation would be appropriate.
According to the government, this will cost £90 million over the next two years – a modest sum in the overall scheme of public expenditure, but a reprieve that will come as a relief to those households which, through no fault of their own, lose their income and their ability to meet their mortgage obligations.
CML members who lend extensively to the affordable housing sector look forward to engaging in developing different ways of doing things to support the expansion of private finance. However, the right conditions need to be in place for this to happen in the way the government envisages and this includes strong regulation as well as targeted capital investment and support for individuals through the welfare benefit system.
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