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| Lenders reject Darling's attack | Lenders reject Darling's attack |
| (2 days later) | |
| Mortgage lenders have hit back at accusations that they are responsible for the rapid rise in house prices. | Mortgage lenders have hit back at accusations that they are responsible for the rapid rise in house prices. |
| Chancellor Alistair Darling said that house price rises were "unsustainable" and lenders should ensure borrowers "have not overstretched themselves." | Chancellor Alistair Darling said that house price rises were "unsustainable" and lenders should ensure borrowers "have not overstretched themselves." |
| But the Council for Mortgage Lenders said the chancellor's remarks were "mis-judged" and "behind the times". | But the Council for Mortgage Lenders said the chancellor's remarks were "mis-judged" and "behind the times". |
| The Treasury would not comment on the criticism but confirmed the chancellor's views. | The Treasury would not comment on the criticism but confirmed the chancellor's views. |
| Council for Mortgage Lenders' director general, Michael Coogan, told Money Box on Radio 4: "The chancellor is simply wrong in his assertion that it is the lenders' fault. | Council for Mortgage Lenders' director general, Michael Coogan, told Money Box on Radio 4: "The chancellor is simply wrong in his assertion that it is the lenders' fault. |
| "I think it reflects someone who is behind the times and off the pace. | "I think it reflects someone who is behind the times and off the pace. |
| People should not be encouraged to get themselves into a position where they cannot make repayments Chancellor, Alistair Darling | People should not be encouraged to get themselves into a position where they cannot make repayments Chancellor, Alistair Darling |
| "It was his predecessor who was encouraging lenders to increase home ownership - a million extra home-owners in the last ten years - and set a target for that to be repeated in the next ten years." | "It was his predecessor who was encouraging lenders to increase home ownership - a million extra home-owners in the last ten years - and set a target for that to be repeated in the next ten years." |
| Irresponsible lending? | Irresponsible lending? |
| But the Treasury said the chancellor stood behind what he had said to the Daily Mail: "unsustainable house price inflation is not good for individuals and is not good for the economy." | But the Treasury said the chancellor stood behind what he had said to the Daily Mail: "unsustainable house price inflation is not good for individuals and is not good for the economy." |
| Mr Darling went on to criticise the mortgage industry for its role in boosting prices. | Mr Darling went on to criticise the mortgage industry for its role in boosting prices. |
| The comment from the chancellor that it is all caused by the lenders' irresponsibility is mis-judged Michael Coogan, director general, the Council for Mortgage Lenders | The comment from the chancellor that it is all caused by the lenders' irresponsibility is mis-judged Michael Coogan, director general, the Council for Mortgage Lenders |
| "Lenders do need to be clear when they are lending money, that... someone can afford to meet the repayments and they have not overstretched themselves. | "Lenders do need to be clear when they are lending money, that... someone can afford to meet the repayments and they have not overstretched themselves. |
| "And in the event that anything does go wrong, the house is worth what people say it is. | "And in the event that anything does go wrong, the house is worth what people say it is. |
| "People should not be encouraged to get themselves into a position where they cannot make repayments." | "People should not be encouraged to get themselves into a position where they cannot make repayments." |
| 'Not so' according to CML | 'Not so' according to CML |
| Mr Coogan responded strongly to any suggestion that lending had been irresponsible. | Mr Coogan responded strongly to any suggestion that lending had been irresponsible. |
| "Arrears remain historically very low, possessions are very low, and we have a million extra home-owners. | "Arrears remain historically very low, possessions are very low, and we have a million extra home-owners. |
| "The trend is likely to go up as a result of interest rate moves, or if customers have overextended themselves in other credit. | "The trend is likely to go up as a result of interest rate moves, or if customers have overextended themselves in other credit. |
| "But the comment from the chancellor that it is all caused by the lenders' irresponsibility is mis-judged." | "But the comment from the chancellor that it is all caused by the lenders' irresponsibility is mis-judged." |
| The Treasury declined to comment on Mr Coogan's accusations. | The Treasury declined to comment on Mr Coogan's accusations. |
| Certainly we expect the rate of increase to soften Charles Collyns, head of research at the International Monetary Fund | Certainly we expect the rate of increase to soften Charles Collyns, head of research at the International Monetary Fund |
| Mr Coogan went on to say his members were already tightening up on lending, as economic circumstances changed and the housing market would cool anyway. | Mr Coogan went on to say his members were already tightening up on lending, as economic circumstances changed and the housing market would cool anyway. |
| Future prices | Future prices |
| That view was supported by Charles Collyns, head of research at the International Monetary Fund, who told the programme: "Certainly we expect the rate of increase to soften. | That view was supported by Charles Collyns, head of research at the International Monetary Fund, who told the programme: "Certainly we expect the rate of increase to soften. |
| "Our own projections are based on the assumption that house prices will be flat over the year ahead, but I would not rule out that house prices might also decline somewhat." | "Our own projections are based on the assumption that house prices will be flat over the year ahead, but I would not rule out that house prices might also decline somewhat." |
| But Jonathan Davis of housepricecrash.co.uk rejected such predictions by the IMF and others. | But Jonathan Davis of housepricecrash.co.uk rejected such predictions by the IMF and others. |
| He told the BBC that they were "economic nonsense by clear vested interests." | He told the BBC that they were "economic nonsense by clear vested interests." |
| Over the next four to six years he forecasts "a national average fall of 30 to 40% and in some regions perhaps - particularly Northern Ireland - more. | |
| "It is so crystal clear it is unbelievable - the vested interests know exactly what is going to happen but it is in their interests not to say." | "It is so crystal clear it is unbelievable - the vested interests know exactly what is going to happen but it is in their interests not to say." |
| BBC Radio 4's Money Box was broadcast on Saturday, 20 October 2007 at 1204 GMT. | BBC Radio 4's Money Box was broadcast on Saturday, 20 October 2007 at 1204 GMT. |