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Darling to aid recovery of wholesale mortgage market

Alistair Darling has vowed to help the recovery of wholesale mortgage markets which he says are “essential to stabilising the housing market”.

Speaking at an EEF manufacturing event last night Darling said the housing market today was in much better shape than it was before it crashed in the early 1990’s. He also said the UK market is in a much stronger position than the US, despite concerns.

Darling said the easing and recovery of the continued tight credit conditions in the secondary mortgage markets is essential. He announced that the Government would consult on “a new ‘gold standard'” for covered bonds and mortgage backed securities which “would help not just the housing market but wider economic growth”. He will report on this proposal in next month’s Budget.

Darling again pushed long-term fixed rate mortgages. He said: “For many households, particularly those on low incomes, fixing the level of mortgage repayments for several years makes real sense and it can also contribute to wider macroeconomic stability.”

John Charcol senior technical manager Ray Boulger says it is good news that the Government has recognised publicly that there is a problem in financing. “My concern is that the Government will spend too long consulting on this. Of course there needs to be a consultation but it needs to be on a short timescale. The Government needs to react quickly on this.”

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