Thursday, Apr 17, 2008
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guardian.co.uk: The Bank of England mortgage plan
What is the Bank of England planning to do?
After intense lobbying by the banking industry, the Bank is drawing up a plan that is intended to make it easier for mortgage lenders to raise money.
Why?
The authorities have realised that the credit crunch is having an impact on the mortgage market, where loans are being withdrawn or offered at higher rates despite cuts to the official base rate. It is also affecting the amount of lending to small and large businesses which could exacerbate any slowdown in the economy.
Posted by plato @ 07:25 PM (646 views) Add Comment
8 Comments
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1. jack c said...
Quote - Does this mean the credit crunch is over? - Certainly not. The mortgage lenders are privately making it known that the extra funds they get access to will merely allow them to maintain the current reduced level of lending, not return to the situation of a year ago when mortgages were freely available.
Abbey (one of the largest UK lenders) publicly stated last week that they do not anticipate a return to 2006 mortgage lending levels for another 5 years !
(IMO) We passed the point of no return several months ago - a huge correction in UK house prices is now inevitable irrespective of Government/BOE intervention
2. renting2 said...
The plan? To use taxpayers hard earned money to shore up the banks balance sheets.
3. Mken said...
Does this mean the Bank of England end up owning people's homes?
Unlikely. Only in the unlikely event of the mortgage lender going bust would this happen.
About as "unlikely" as The Bank of England mortgage plan itself.
4. alan said...
Can't we delay it till July when lots more stupid Buy to Letters will have gone bankrupt.....please?
5. Jimmyb said...
"the plan? To use taxpayers hard earned money to shore up the banks balance sheets"
The plan is to TRY and save the skin or Gordon Brown. I heard him say that he is trying to help first time buyers, AHH what a great fellow - I he realy wanted to help first time buyers he would let the market take it's natural course and crash. All he wants is to hold onto power, spineless g*t.
6. it_is_going_with_a_bang said...
Is it that hard for GB to realize that Banks know that property is overvalued and hence now will not support the current values needed to sustain it?
The prices are totally unaffordable. Unlike Gordon, we can't all just turn on a money printing machine when the cash runs low.
We just stop spending.
Gordon obviously doesn't actually know what this feels like.
The banks will just use this to improve their profits.
I don't think they have any real intention of saving Gordon's skin.
7. Blindleadtheblind said...
Political expediency is the reason the non thinking Government wishes to maintain borrowing and they hope house prices. Unfortunately for them and the public any such plan is bound to fail as trying to maintain the unmaintainable will be a very costly folly. Sadly the lending institutions who are largely responsible for the current situation will be the only ones who benefit...maybe I am mistaken and this was the plan all along...simple redistribution of wealth?
8. Ijjhall said...
Unless the BOE buys the toxic mortgages this is NOT a bail out....of course that is not to say that this won't be floated once this wheeze falls flat. Then will be the time to get angry although judging by the stick Harriet Harman got last night on BBC Question Time (the audience were plain hostile) over cutting the 10p tax starting rate to shore up the govt's borrowing, Brown is going to have a hell of a job fooling people being taxed to death that yet more taxpayers money can be thrown around like confetti - there is a mood change going on in this country against all this wild tax and spend because people are just struggling with the burden of it all.