Saturday, May 22, 2010
Begging bowl business
Independent: Lenders warn of £400bn funding gap as mortgages fall back again
Britain's biggest mortgage lenders have issued a thinly veiled threat that the country's housing market could be plunged into a new downturn unless the Government and the Bank of England do more to help the sector to improve its funding. Data released by the Council of Mortgage Lenders yesterday revealed that they lent just £10.2bn to homebuyers and people remortgaging during April, 12 per cent less than in March and the worst figure for the month for a decade.
Posted by quiet guy @ 12:03 PM (1642 views) Add Comment
11 Comments
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1. quiet guy said...
Sorry, I know this has already been addressed in the blog but Prosser puts the issue in such stark terms that I felt that another posting was justified:
Michael Coogan, director general of the CML, warned that many mortgage lenders faced a funding crunch. Not only is the sector struggling to attract retail savers with interest rates at all-time lows, the Bank of England is insisting that it will close support plans such as the special liquidity scheme, introduced at the height of the financial crisis, from the beginning of 2011 onwards. The effect will be to withdraw around £400bn of funding for lending from the sector.
"We still do not know how the incoming Government plans to address the funding gap looming over the next few years in the mortgage market," Mr Coogan said. "It is important that the new Government grasps this nettle. Unless funding issues are addressed, any recovery in lending may well be curtailed as the repayment date on the support schemes gets closer."
2. paul said...
I've got a radical idea. How about the lending banks raise their savings rates to attract capital from savers?
You know, the old fashioned way of raising money to lend ... ?
recaptcha: "prosaic and"
3. garch said...
Or raise their mortgage rates so that they can offer MBS investors higher yields...
4. mander said...
Government plans to address the funding gap?
The Government should not print money to address funding by buying mortgage securities. Funding is a pure private banking issue where they simply have to assess the ability of the person to pay the loan back and not ask for the Government and the tax payer to take on the risk. What capitalism is this?
5. alan_540 said...
Or how about lending at 2x income?
6. miken said...
This article is written as if the bank funding problem is the only issue. What makes them so sure there are investors/FTB out there actually wanting to get a new mortgage right now? Where are the statistics showing how many people they turned down for loans because of a funding issue? My feeling is that the industry has run out of suckers and they are whinging!
7. magnifico said...
...and I still don't get what's so terrible about prices finding a more sensible level.
8. dill said...
The next, largely undiscussed, symptom of this malaise is soon to surface IMO - Willingness to pay.
9. Notyethomeless said...
I spoke to a guy today - nice bloke - who's put his 3 bed garden flat on market today at £550k. He bought it in 2007 at £375 k.
He says it's crazy, but what can you do?
"when the music's playing, ya gotta keep dancing..."
10. mark wadsworth said...
Cool!!
A few days ago, the self-same Mike Coogan was wailing about the 25% funding gap = about £300 billion; by the weekend it has crept up to £400 billion.
Way to go, Mike! Why don't you go get yourself a job as Finance Minister in Greece or something?
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