Cable backs RBS six month grace period

Vince Cable, shadow chancellor for the Liberal Democrats, has called for government supported lenders to follow Royal Bank of Scotland and give borrowers in arrears six months before pursuing repossession.

Cable says: “This welcome news will be of great relief to struggling RBS customer however, it will be a mere drop in the ocean unless it is followed by the whole industry.

“The government must now insist that all the nationalised and part-nationalised banks follow suit.”

Commenting on the announcement that mortgage lending fell by nearly 70% in October, he adds: “As the housing market continues to fall we should expect to see the amount of mortgage lending to fall. However, a collapse of this magnitude suggests this is much more than people choosing not to move house.

“It is critical that the government ensures the banks start lending again to prevent this recession becoming deeper and even more painful.”