This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/uk_politics/7669231.stm
The article has changed 4 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Lenders defend mortgage policies | Lenders defend mortgage policies |
| (9 minutes later) | |
| Mortgage providers have defended their lending policies after MPs said they were not "hungry for business" and their caution was damaging the market. | Mortgage providers have defended their lending policies after MPs said they were not "hungry for business" and their caution was damaging the market. |
| The Council of Mortgage Lenders (CML) said its members wanted to help the ailing housing market by helping first-time buyers gain access to finance. | The Council of Mortgage Lenders (CML) said its members wanted to help the ailing housing market by helping first-time buyers gain access to finance. |
| But lenders had to weigh this up against the risks of offering "undue incentives" to those wanting to buy. | But lenders had to weigh this up against the risks of offering "undue incentives" to those wanting to buy. |
| Property sales are at a 30-year low as the squeeze on mortgages continues. | Property sales are at a 30-year low as the squeeze on mortgages continues. |
| Speaking on Monday, Gordon Brown said there was plenty of demand for housing in the UK but too few mortgages "at the right prices". | |
| David Miles, chief UK economist at Morgan Stanley and a former government advisor, said it could take a further 5% to 10% fall in prices for the market to "stabilise" and activity to pick up. | David Miles, chief UK economist at Morgan Stanley and a former government advisor, said it could take a further 5% to 10% fall in prices for the market to "stabilise" and activity to pick up. |
| While warning this forecast was an "educated guess", Mr Miles - who is also a director of the Financial Services Authority - said this level of decline may be needed to move beyond the current "very awkward period" in which many people were shunning the market because they expected prices to fall further. | While warning this forecast was an "educated guess", Mr Miles - who is also a director of the Financial Services Authority - said this level of decline may be needed to move beyond the current "very awkward period" in which many people were shunning the market because they expected prices to fall further. |
| 'Falling apart' | 'Falling apart' |
| Appearing before the Treasury Select Committee, industry representatives faced accusations of not doing enough to support activity in the housing market as prices continue to fall. | Appearing before the Treasury Select Committee, industry representatives faced accusations of not doing enough to support activity in the housing market as prices continue to fall. |
| Banks and building societies have sharply cut back on mortgage lending amid the current financial turmoil - the government made an increase in support for homebuyers a pre-condition of its £37bn bailout of a trio of High Street banks. | Banks and building societies have sharply cut back on mortgage lending amid the current financial turmoil - the government made an increase in support for homebuyers a pre-condition of its £37bn bailout of a trio of High Street banks. |
| It strikes you as an industry which is not really hungry for business at the moment George Mudie, MP Home loans hit new low | It strikes you as an industry which is not really hungry for business at the moment George Mudie, MP Home loans hit new low |
| MPs said lenders seemed content to hoard cash in the current climate and let the market determine how far house prices should fall, leading to a sharp rise in "traumatic" home repossessions. | MPs said lenders seemed content to hoard cash in the current climate and let the market determine how far house prices should fall, leading to a sharp rise in "traumatic" home repossessions. |
| "Your industry is falling apart and you seem very relaxed about it," George Mudie MP, said. | "Your industry is falling apart and you seem very relaxed about it," George Mudie MP, said. |
| He added: "It strikes you as an industry which is not really hungry for business at the moment." | He added: "It strikes you as an industry which is not really hungry for business at the moment." |
| Referring to government guarantees to underwrite £250bn in lending between banks, Mr Mudie said this should eliminate "any excuse" for institutions not "lending money and starting the market". | Referring to government guarantees to underwrite £250bn in lending between banks, Mr Mudie said this should eliminate "any excuse" for institutions not "lending money and starting the market". |
| The CML's head of research Bob Pannell welcomed the state intervention to boost money markets saying it was "essential" to giving banks the confidence to start lending to people again. | The CML's head of research Bob Pannell welcomed the state intervention to boost money markets saying it was "essential" to giving banks the confidence to start lending to people again. |
| But he warned that this would not have an immediate impact on the mortgage market and firms' willingness to lend, particularly to first-time buyers. | But he warned that this would not have an immediate impact on the mortgage market and firms' willingness to lend, particularly to first-time buyers. |
| "The housing market cannot be separated from the wider economy. | "The housing market cannot be separated from the wider economy. |
| "You have to recognise that young households coming into home ownership will always do so on a relatively highly leveraged basis so they are a higher risk category of customers. | "You have to recognise that young households coming into home ownership will always do so on a relatively highly leveraged basis so they are a higher risk category of customers. |
| "Lenders have to exercise quite a difficult judgement about encouraging first-time buyers without giving undue incentives which perhaps draw in too many at too young an age or with too uncertain an income." | "Lenders have to exercise quite a difficult judgement about encouraging first-time buyers without giving undue incentives which perhaps draw in too many at too young an age or with too uncertain an income." |
| Asked about the current state of the housing market, Nationwide's chief economist Fionnuala Earley said prices were now falling at a faster rate than in the early 1990s. | Asked about the current state of the housing market, Nationwide's chief economist Fionnuala Earley said prices were now falling at a faster rate than in the early 1990s. |
| Simon Rubinsohn, chief economist of the Royal Institute of Chartered Surveyors, said the decline in prices and the fall-off in sales made the current crisis more acute than the early 1990s. | Simon Rubinsohn, chief economist of the Royal Institute of Chartered Surveyors, said the decline in prices and the fall-off in sales made the current crisis more acute than the early 1990s. |
| However, he said the recent increase in enquiries from buyers about properties was more encouraging. | However, he said the recent increase in enquiries from buyers about properties was more encouraging. |