The Council of Mortgage Lenders has warned that competitive mortgages will be scarce on the UK mortgage market until the Government changes the way in which lenders raise money. The CML highlighted a 300 billion pounds funding gap between what property buyers wish to borrow and what funds are available to lenders will open up in 2014.
The CML were reported in mortgage news as saying: "The collapse of wholesale funding markets has left a £300bn gap in mortgage funding. That gap has been filled temporarily by government funds through the special liquidity scheme and the credit guarantee scheme. By 2014, however, both of these schemes will have expired. Hanging over the mortgage market therefore is a major uncertainty about how lenders will be able to refinance this £300bn over time. Unless there is a policy approach intended to encourage the development of wholesale funding, we are likely to see a long-term decline in choice for UK mortgage customers."
The consequences could become quite dire, the CML warned, commenting: "That would leave firms continuing to rely on government funding, and the UK at risk of a chronic undersupply of credit – and the rationing of mortgages for customers – for many years to come."
Mortgage funding gap warning from Council of Mortgage Lenders
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Mortgage funding gap warning from Council of Mortgage Lenders
Wed, 03 Feb 2010
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