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Homeowners to get 'mortgage help' Homeowners to get 'mortgage help'
(30 minutes later)
Homeowners will have enough support to ensure that their homes are not repossessed, the government says.Homeowners will have enough support to ensure that their homes are not repossessed, the government says.
The comments came after key mortgage industry figures met Chancellor Alistair Darling and Housing Minister Caroline Flint at 11 Downing Street.The comments came after key mortgage industry figures met Chancellor Alistair Darling and Housing Minister Caroline Flint at 11 Downing Street.
But ministers did not outline how they would stop people losing their homes.But ministers did not outline how they would stop people losing their homes.
The Council of Mortgage Lenders (CML) described the meeting as "useful" and said lenders were playing their part in keeping customers in their homes.The Council of Mortgage Lenders (CML) described the meeting as "useful" and said lenders were playing their part in keeping customers in their homes.
"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," said Ms Flint, following the meeting."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," said Ms Flint, following the meeting.
Mortgage squeezeMortgage squeeze
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.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.
I hope that lenders continue to take their responsibilities towards customers seriously Chancellor Alistair Darling
Mortgage providers have tightened up on lending because the banks have not been keen to lend to each other.Mortgage providers have tightened up on lending because the banks have not been keen to lend to each other.
Mortgage lending in the first three months of the year was down by 8% compared with the first quarter of 2007, according to the CML's latest figures.Mortgage lending in the first three months of the year was down by 8% compared with the first quarter of 2007, according to the CML's latest figures.
The number of mortgage products on the market has now dipped below 4,000 as a result of the current climate, 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, according to financial information service Moneyfacts.
That is a dramatic drop compared with the 13,428 products available in April last year.That is a dramatic drop compared with the 13,428 products available in April last year.
Tuesday's 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.Tuesday's 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.
Move welcomedMove welcomed
Lenders described the plan as an "important step" in tackling the industry's funding difficulties.Lenders described the plan as an "important step" in tackling the industry's funding difficulties.
They said that "in due course" it should help banks and building societies to ensure that competitive mortgage products were available to potential borrowers.They said that "in due course" it should help banks and building societies to ensure that competitive mortgage products were available to potential borrowers.
Latest figures showed that the number of people whose homes were repossessed in 2007 went up by 21%. The CML said 27,100 homes, the highest figure since 1999, were taken over by lenders after people fell behind with repayments.Latest figures showed that the number of people whose homes were repossessed in 2007 went up by 21%. The CML said 27,100 homes, the highest figure since 1999, were taken over by lenders after people fell behind with repayments.
But the CML said that the repossession levels remained low in a strong economy and the government stressed that lenders should continue to treat customers "fairly and sympathetically".But the CML said that the repossession levels remained low in a strong economy and the government stressed that lenders should continue to treat customers "fairly and sympathetically".
'Not the 90s'
Ms Flint said: "It is important to recognise we are dealing with an entirely different situation in the market from what was experienced in the early 90s.
Banks have since attempted to rebuild the profitability of mortgage lending and have doubled the difference between what they charge and the base rate BBC Business Editor Robert Peston Read Robert Peston's blog
"Demand for housing from first-time buyers and young families is high and the fundamentals of the economy are sound.
"But we know that some prospective borrowers are facing difficulties at the moment because of the global supply of credit."
The chancellor said that the government was working to ensure a fair and functioning UK mortgage market.
"I hope that lenders continue to take their responsibilities towards customers seriously," he added.
The CML will report back at the end of May with information on mortgage-holders facing difficulties.