CML publishes new Mortgage Market Manifesto
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The Council of Mortgage Lenders has comprised a new, post-credit crunch manifesto for the mortgage market over the lifetime of the next parliament.
The CML published its original Mortgage Market Manifesto six years ago before the 2005 general election.
In its new manifesto it calls on the government to provide better support for borrowers in difficulty and address the £320bn mortgage funding gap.
It says the funding gap has been filled temporarily through the Bank of England and Treasury special liquidity and credit guarantee schemes, but these are due to expire between April 2011 and January 2012.
It says lenders want a private sector solution to the funding gap. But the key goals are to ensure that the transition from support by the Bank and the Treasury to provision by the private sector is as smooth as possible and that, going forward, the UK has an adequate supply of mortgage funding that is robust enough to withstand future shocks.
In the forthcoming Budget, it hopes there will be a further update on an announcement made in the pre-Budget report in December about ongoing work to support mortgage funding.
Looking further ahead, it wants to see over the lifetime of the next parliament a co-ordinated approach to improve the operation of funding markets.
It calls on the next government to set up an expert group with representatives from the tripartite authorities and the industry to oversee this process.
As well as encourage the development of a base of cash investors, particularly from domestic institutions, channelling funds into UK residential mortgage-backed securities rather than overseas, where the benefit is lost to national consumers and businesses.
It also wants the government to consider consider reform of income support for mortgage interest and make it more widely available at the point of need for households experiencing payment difficulty due to a loss of income, offset by taking a second charge on the property.
It advises that the government should avoid knee-jerk regulatory reactions to the problems in the banking system, globally and in the UK, and in response to mortgage market developments during the recession.
