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Sub-zero net lending on the cards in 2009

Net mortgage lending could plummet below zero in 2009/10 as the economic downturn continues.

The Crosby report on mortgage finance, commissioned by the Treasury in April, has investigated the causes and possible effects of the credit crunch.

Sir James Crosby, author of the review, has found that pressures on wholesale funding markets and the collapse of securitisation have sapped lenders’ desire to provide credit to consumers and businesses.

The review says: “Much lower base rates will help borrowers but will do little for the availability of mortgage finance. In such an environment, there are few banks with the capacity to increase lending. New net lending is likely to fall below zero in 2009 with only a modest recovery likely in 2010.”


Lenders face a dilemma

What a year it’s been. Of course, 12 months ago it was already clear that 2008 would be difficult, to say the least. Wholesale funding markets were paralysed – as they still are – and most of us were expecting a sharp reduction in house price growth. But nobody predicted a near-collapse of the financial system and the nationalisation of several banks. The economy is now much weaker than we expected at the start of 2008 and consumer confidence has collapsed. So, the real issue for 2009 is how to keep nearly 12 million borrowers secure in their homes.

Barroso shows typical EU contempt for voters

In a broadcast on French radio Jose Manuel Barroso, the President of the European Commission and former Prime Minister of Portugal, said that some British politicians had recently said to him, “If we had the euro, we would have been better off.”

Bank of England to cut rates to record low as gloom intensifies

Data released by the Bank of England today showed mortgage approvals are bottoming out in the low 30 thousands. The number of mortgage approvals for house purchase fell by 1,000 to 32,000 in October – matching August’s record low since records began in 1993. Just 460,000 mortgages have been approved over the year to date […]

Get to know your brokers

Alot of lenders have a lot of time on their hands right now. What are they doing with it? One worthwhile thing would be to get to know their brokers better.


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