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Lenders slam government policies Lenders slam government policies
(30 minutes later)
The government's priorities for lenders are "conflicting and incoherent", a banking group has said.The government's priorities for lenders are "conflicting and incoherent", a banking group has said.
Michael Coogan, of the Council of Mortgage Lenders (CML), said mortgage providers were caught in a "tug of war" between boosting loans and stability.Michael Coogan, of the Council of Mortgage Lenders (CML), said mortgage providers were caught in a "tug of war" between boosting loans and stability.
His comments came as the CML said home loan lending had risen 14% in October compared with the previous month.His comments came as the CML said home loan lending had risen 14% in October compared with the previous month.
The number of loans granted for house purchases in the UK rose to 39,900, but this was still down 52% on a year ago. In a separate survey, the government's own figures showed property prices dipped by 2.5% in the same month.
CriticismCriticism
Mr Coogan said lenders were facing a range of conflicting pressures. These included protecting themselves against future losses, passing on rate cuts to borrowers, and keeping savings rates high.Mr Coogan said lenders were facing a range of conflicting pressures. These included protecting themselves against future losses, passing on rate cuts to borrowers, and keeping savings rates high.
The tug of war with lenders being pulled in every direction at once needs to end Michael CooganCouncil of Mortgage Lenders Northern Rock snubs government The tug of war with lenders being pulled in every direction at once needs to end Michael CooganCouncil of Mortgage Lenders Northern Rock snubs government class="" href="/1/hi/business/7771118.stm">House sales 'are still falling'
They also had to assist those facing arrears on their mortgage repayments, as well as helping to maintain economic activity during a downturn.They also had to assist those facing arrears on their mortgage repayments, as well as helping to maintain economic activity during a downturn.
He was deeply critical of the government for their failure to pick which of these was the most important.He was deeply critical of the government for their failure to pick which of these was the most important.
"Current policy objectives are conflicting and incoherent. The government needs to decide on its key priority," the CML's director general said."Current policy objectives are conflicting and incoherent. The government needs to decide on its key priority," the CML's director general said.
"The tug of war with lenders being pulled in every direction at once needs to end.""The tug of war with lenders being pulled in every direction at once needs to end."
Slight upturnSlight upturn
The CML's figures show that the total value of loans granted for house purchases in October was up 10% on September to £5.5bn. This was 57% lower in value than a year ago.The CML's figures show that the total value of loans granted for house purchases in October was up 10% on September to £5.5bn. This was 57% lower in value than a year ago.
If you can take anything positive from the latest depressing house price figures, it's that we're getting closer to the bottom David Smith, Dreweatt Neate estate agents
The number of loans granted for house purchases in the UK rose to 39,900, but this was still down 52% on a year ago.
With house prices falling, first-time buyers are not having to borrow as much they did a year ago.With house prices falling, first-time buyers are not having to borrow as much they did a year ago.
But with banks and building societies keen to lend to "secure" borrowers, first-time buyers are having to find a bigger proportion of the loan as a deposit.But with banks and building societies keen to lend to "secure" borrowers, first-time buyers are having to find a bigger proportion of the loan as a deposit.
The average deposit of 17% is the highest since 1979, the figures show.The average deposit of 17% is the highest since 1979, the figures show.
Falling pricesFalling prices
The figures were published at the same time as the government's own housing statistics showed that UK property prices in October were 7.4% lower than a year ago.The figures were published at the same time as the government's own housing statistics showed that UK property prices in October were 7.4% lower than a year ago.
Buyers are having to find a large deposit to secure a mortgageBuyers are having to find a large deposit to secure a mortgage
That pushed the average UK house price down to £203,539, the Department of Communities and Local Government (DCLG) said.That pushed the average UK house price down to £203,539, the Department of Communities and Local Government (DCLG) said.
Annual average house prices fell by 7.3% in England, 7.8% in Wales, 4.5% in Scotland, and 20.5% in Northern Ireland.Annual average house prices fell by 7.3% in England, 7.8% in Wales, 4.5% in Scotland, and 20.5% in Northern Ireland.
The regional breakdown shows that house prices have fallen the most in the East Midlands and the South West (down 9.5%), but dropped the least in the North West (5.6%).The regional breakdown shows that house prices have fallen the most in the East Midlands and the South West (down 9.5%), but dropped the least in the North West (5.6%).
The highest average house price is in London, and the lowest in the North East - with a difference of £180,256 between the two. The highest average house price is in London (£318,831), and the lowest in the North East (£138,575) - a difference of £180,256 between the two.
Earlier on Tuesday, the Royal Institution of Chartered Surveyors said property prices fell further in November, although interest was rising among potential buyers.
David Smith, senior partner at Dreweatt Neate estate agents, said: "If you can take anything positive from the latest depressing house price figures, it's that we're getting closer to the bottom.
"Prices now look attractive but there is a lot of uncertainty."
Meanwhile, the government's Lending Panel meets for the first time on Tuesday.Meanwhile, the government's Lending Panel meets for the first time on Tuesday.
The group, unveiled in the pre-Budget report, is made up of representatives from banks, the Bank of England and debt advisers and is set to discuss the squeeze on mortgage lending. The group, unveiled in the pre-Budget report, is made up of representatives from banks, the Bank of England and debt advisers, and is set to discuss the squeeze on mortgage lending.