PPI Claim News - 8/2/2010
Loan Protection: Banks still 'need government support' to offer mortgages
Britain's banks are still depending on government support in order to administer home loans, the Council of Mortgage Lenders (CML) has claimed.
In a paper set out to policy makers, the CML warn that both banks and other mortgage lenders could hike interest rates and cut the number of lendings if the government demands repayment of financial support.
Since 2008, the treasury has provided over £300 billion to help get the industry back on its feet. However, with signs of economic recovery showing this assistance is likely to be withdrawn.
The CML has warned that impending financial repayment could result in a decline in choice for the consumer.
"Emergency government action to fill the gap has been welcome. But government support has focused almost exclusively on larger deposit-takers, reinforcing the lack of overall competitiveness in the mortgage market," the CML said in a statement.
The CML has proposed policymakers present a long-term initiative "to identify and develop a sustainable funding model for the mortgage market of the future".
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