The UK's most up-to-date social housing and public sector news website
UK home buyers 'face years of mortgage rationing'
Other Housing stories
- Camden Council gains possession of 100 homes in illegal sub-letting crackdown
- 'Self-styled countess' jailed for £200,000 benefit fraud
- Professor Peter Roberts OBE becomes chair of KHT
- PM meets Lovell-trained east Manchester apprentices
- First homes completed in £100m estate refurbishment scheme
Advertisement
The UK faces mortgage rationing for many years to come unless
the Government reforms the way lenders can raise money, a trade
body warned today.
The Council of Mortgage Lenders said the collapse of the wholesale
funding markets in the wake of the credit crunch had left a
£300 billion mortgage funding gap.
It said the shortfall had been filled temporarily by Government
funds through the special liquidity scheme and credit guarantee
scheme,
But it warned that there were "major uncertainties" about how
lenders would manage once these schemes expired in 2014, adding
that the gap could not be filled by savers' deposits alone.
The group said unless the Government took steps to encourage the
development of wholesale funding, there was likely to be a
long-term decline in choice for mortgage customers.
The CML said: "The Government needs to develop and pursue a clear
strategy for putting UK mortgage funding markets back on a
sustainable footing.
"Without policy support, it may be difficult to re-establish a
sustainable, long-term residential mortgage-backed securities and
covered bond market in the UK on the scale needed to plug the
funding gap.
"That would leave firms continuing to rely on government funding,
and the UK at risk of a chronic under-supply of credit - and the
rationing of mortgages for customers - for many years to
come."
The CML said the problem was being exacerbated by the scale of
proposed regulatory reform and the impact this would have on
lenders.
It said that while lenders accepted the need for reform in response
to the financial crisis, there was a danger that the way it was
implemented could create additional problems for firms.
WallyR
Commented 4 weeks ago
Whenever you find yourself needing to move out of your family home, there are few things to consider. The first thing to decide is whether you want to rent or buy a new house. There's a lot of debate about whether it's better to buy or rent a house. Buying a home involves a mortgage, taxes, insurance, and maintenance – costs are prohibitive, and it sends a lot of people running for payday loans. Renting or leasing could mean lower or higher payments, depending on where you live than a mortgage payment. You also don't have an asset that you can sell for a profit, or any tax write-offs for renting. Home values fluctuate and a person can easily become underwater on a mortgage. Home buyers also have to consider if their lifestyle is stable enough to be in one area for long periods of time.