24
Feb
Northern Rock move 'will help all lenders'
Mortgage lending across the board will be increased thanks to the
decision of the government to use Northern Rock to lend £14
billion over the next two years, the Council of Mortgage Lenders
(CML) has said.
It was revealed yesterday that the Newcastle-based institution,
which was nationalised last year, will look to offer £5
billion this year and £9 billion in 2010.
Commenting on the measure, CML director general Michael Coogan said
that any move to boost lending "is positive".
He noted that the £18 billion in mortgage redemptions that
Northern Rock had to pay back to the government had been absorbed
by the rest of the industry, a burden they will no longer
face.
"By removing this market pressure, other lenders as well as
Northern Rock should experience an increased capacity to lend to
other borrowers," Mr Coogan concluded.
Announcing the move yesterday, the Treasury stated that Northern
Rock will be restructured to allow it to carry out its mortgage
lending separately from all its other business.
