Government rattled by repo wrath

Published 23rd Apr 2008

The Government has pledged to help struggling homeowners avoid repossession...

The comments came after key mortgage industry figures met Chancellor Alistair Darling and Housing Minister Caroline Flint at 11 Downing Street. The meeting followed the chancellor's backing of a £50bn Bank of England plan to allow banks to swap mortgage debts for government bonds to help them during the credit crunch.

After the meeting, Ms Flint commented: "We want to ensure there continues to be stability and fairness in the housing market, and that the support is in place for consumers who may need it right now”.

Concerns have been raised about the steep rise in repayments facing an estimated 1.4 million people coming to the end of short-term fixed rate deals, particularly those who do not have high levels of equity in their homes.

Dramatic drop
A spokesperson for The Council of Mortgage Lenders (CML) commented: “The meeting was useful and it’s good that lenders are playing their part in keeping customers in their homes”.

According to financial information service Moneyfacts, the number of mortgage products on the market has now dipped below 4,000 as a result of the current climate. That is a dramatic drop compared with the 13,428 products available in April last year.

Liberal Democrat Treasury spokesman Vince Cable called on the government to be clear about what promises it had made to mortgage lenders. "One of the possibilities being mooted...is that the taxpayer could have been tapped for additional money to provide additional benefits to people who are in mortgage arrears.

“We really need to find out exactly what has been happening in these talks so that the government isn't making any more concessions at the expense of the taxpayer."

Source: ' Move Channel Ltd '

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