Council of Mortgage Lenders' welcomes solution to strengthen the mortgage funding market

Further consultation hoped to deliver early progress

The Council of Mortgage Lenders' (CML) combined members together undertake around 98 per cent of all residential mortgage lending in the UK. Responding to the chancellor Alistair Darlings first Budget, the CML said that they welcomed the announcements of further consultation on market-led solutions to strengthen the mortgage funding market, and hoped for early progress with active participation by the Bank of England. 

They also commented that they were pleased the government did not commit to particular "gold standard" measures, that could have been damaging. The working group designed to bring forward proposals will report to the chancellor in the summer with a view to proposals in the Pre-Budget report.

It is a similar story of welcome measures but a lack of apparent urgency on sale-and-leaseback schemes, where the Financial Services Authority and the Office of Fair Trading have been tasked with undertaking a review of the operation of such schemes, but where there is no timescale for any measures to tighten up requirements on those operating in this sector.

The CML commented that the modest announcements relating to shared equity schemes for key worker first-time buyers, while potentially welcome are unlikely to provide any short-term relief to affordability and entry costs for first-time buyers to the housing market, where a stamp duty reprieve would have done so. 

Also welcomed by the CML is the recognition of the problems facing the mortgage-backed securities market, and the need for market-led solutions. A spokesman commented that “we look forward to working with the Treasury to help ease mortgage funding pressures this year, and to look again at the ongoing market for low-cost home-ownership and long-term fixed rate mortgages for those niche groups of borrowers who would benefit from them."