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CML attacks Government’s “conflicting and incoherent” policies

The Council of Mortgage Lenders has called on the Government to end its “conflicting” attacks on mortgage lenders.

CML director general Michael Coogan says: “To different degrees lenders are facing conflicting pressures to recapitalise against possible future losses, service government’s preference shareholdings at 12%, pay a premium to access the Bank of England Special Liquidity Scheme, show forbearance to borrowers in arrears, follow base rate moves down to help their existing borrowers, keep savings rates high to support existing savers, and provide competitive rates to new borrowers and savers to maintain economic activity in a recession.

“And they are supposed to ensure their long term financial stability to help the UK economy rebuild itself when we are out of the recession.”

“Current policy objectives are conflicting and incoherent. The government needs to decide on its key priority. The tug of war with lenders being pulled in every direction at once needs to end.”

Coogan says the problem still lies in funding issues, which will only come together once the Government reassesses its stance on mortgage lending and bank recapitalisation.

The CML revealed that there were 39,900 house purchase loans in October, worth £5.5 billion. This was actually an increase of 14 per cent from September, but an annual decline of 52 per cent.

It found that the rise in house purchase lending was evenly spread across first-time buyers and home movers. There were 15,400 loans to first-time buyers and 24,500 home mover loans in October.

It found gross lending rose slightly to £18.6bn, up 6 per cent from September but 44 per cent lower than October last year.

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