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Lenders must be pressured to lend

Remember 1974? Professional football matches were played on Sundays for the first time, the UK’s first McDonald’s restaurant opened in south London and Ali beat Foreman in their famous rumble in the jungle.

Meanwhile, You won’t find another fool like me by the New Seekers topped the hit parade.

Today, that refrain could be sung to home seekers by embittered lenders as Council of Mortgage Lenders figures show the number of mortgages fell last year to its lowest level since 1974. Just 516,000 mortgages were granted – down 49% on 2007.

It is becoming clear that lenders are no longer interested in lending, especially to first-time buyers, as the average deposit required is now more than 20%. Nor are they interested in backing the broker sector that supported them during the good times.

A lot of best buy deals are only available direct from lenders and many brokers have had to pull down their shutters for good.

But it’s time for the sector to come out fighting. Brokers and trade bodies should be lobbying to put pressure on lenders to free up some of the billions in taxpayers’ cash they have been given.

Now that the Bank of England is injecting freshly printed cash into the money markets it is important banks are prevented from hoarding this.

They should be forced to use it to oil the wheels of finance and the most important wheel is the mortgage market.


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