Mortgage rescue plan gets positive response
Government plans to make mortgages - including mortgages for professionals - more affordable has been welcomed by brokers.
Some lenders have been refusing to pass on interest rate cuts from the Bank of England to mortgage holders because of the credit crunch.
This is because the ongoing financial crisis has made it much more difficult for many mortgage firms to raise revenue on the money markets.
Therefore, many are looking to claw back cash in other ways - including charging borrowers more interest for their home loans.
In response to this, the government plans to allow the firms to swap some of their worst-performing assets for government bonds - which can then be traded on the markets.
Speaking to the broadcaster, Simon Tyler at Chase de Vere brokers said: "Anything that's going to provide some sort of way in which the banks can start to lend to each other and move the machine forward is going to be massively welcomed."
The Council of Mortgage Lenders agreed, also saying that it "welcomed" the proposals.
Some lenders have been refusing to pass on interest rate cuts from the Bank of England to mortgage holders because of the credit crunch.
This is because the ongoing financial crisis has made it much more difficult for many mortgage firms to raise revenue on the money markets.
Therefore, many are looking to claw back cash in other ways - including charging borrowers more interest for their home loans.
In response to this, the government plans to allow the firms to swap some of their worst-performing assets for government bonds - which can then be traded on the markets.
Speaking to the broadcaster, Simon Tyler at Chase de Vere brokers said: "Anything that's going to provide some sort of way in which the banks can start to lend to each other and move the machine forward is going to be massively welcomed."
The Council of Mortgage Lenders agreed, also saying that it "welcomed" the proposals.
