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Chancellor says CML “misunderstood” his call for return to 2007 levels

The Chancellor Alistair Darling has said the Council of Mortgage Lenders “clearly misunderstood” his comments on a return to 2007 mortgage levels.

Speaking in Parliament this afternoon, Conservative Shadow Chancellor George Osborne referred to the CML’s comments that a return to 2007 lending levels would be “neither prudent or desirable”.

But the Chancellor Alistair Darling said the CML had “clearly misunderstood” the Government and clarified that the Treasury statement called only on the Royal Bank of Scotland and the merged Lloyds TSB / HBOS bank to provide the same “credit availability” to individuals and small businesses as in 2007.

He said his statement did not apply to the whole mortgage market and insisted that even those banks it did affect would still be expected to assess individual loan applications prudently.

The CML earlier called for clarity over the Treasury’s statement calling for banks to commit to “the availability and active marketing of competitively-priced lending to homeowners and to small businesses at 2007 levels” and “support for schemes to help people struggling with mortgage payments to stay in their homes, and to support the expansion of financial capability initiatives”.

It said: ”The CML doubts whether, in the current market where house prices have been falling and demand has reduced, it would be either prudent or desirable for the volume of lending to home-owners to equate to 2007 levels.”

But the CML has since welcomed the Government’s clarification that the commitment to restoring flows of lending to the market is “namely an aspiration to achieving a broad, deep mortgage market in general with a good spread of products enabling access to the mortgage market for all credit-worthy borrowers”.

Shadow Chancellor George Osborne also queried why Alistair Darling had gone from favouring taking preference shares in banks to taking large amounts of ordinary shares.

Alistair Darling also revealed the Bank of England is to lend £100m to the UK arm of the collapsed Icelandic bank Landsbanki to help it repay UK creditors.


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All change

If a week is a long time in politics, as remarked by Harold Wilson, a month in today’s mortgage market is interminable. Last month I reported some good news on mortgage rates, with the bigger lenders – Halifax, Abbey, Nationwide and Lloyds TSB – reducing fixes and trackers on the back of falling swaps. The situation has now reversed as rising money market rates see lenders hike rates on residential and buy-to-let mortgages.

The Downsizing Delusion: Why relying exclusively on your home to fund your retirement may end in tears

By Steve Webb, director of policy The British obsession with homeownership can have dangerous consequences. A recent survey by Barings¹ found that up to three million people of working age were planning to rely wholly on the value of their home to fund their retirement. We are not talking about people investing in buy-to-let or […]


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