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Mortgages

Volume 488: debated on Tuesday 3 March 2009

To ask the Chancellor of the Exchequer (1) what assessment he has made of (a) the contribution of UK non-bank lenders to the mortgage market and (b) the effect on levels of mortgage lending of the levels of activity of UK non-bank and specialist lenders in the last 12 months; (259418)

(2) what response he has made to the recommendation in the Crosby Report on mortgage finance markets for the introduction of a new guarantee scheme for residential mortgage-backed securities available to banks, building societies and specialist lenders;

(3) how many meetings he has had with representatives of (a) banks, (b) building societies and (c) non-bank lenders to discuss measures to stimulate mortgage lending in the last three months;

(4) what assessment he has made of the effects of the Government’s lending support initiatives on (a) competition among banks, building societies and non-banks in the mortgage market and (b) the availability of mortgage finance to consumers in the last 12 months;

(5) what steps his Department is taking to encourage a competitive and diverse market for mortgage finance;

(6) pursuant to the statement of 19 January 2009, Official Report, columns 483-86, on financial markets, what recent steps his Department has taken to support lending by the non-bank sector;

(7) pursuant to the statement of 19 January 2009, Official Report, columns 483-86, on financial markets, which of the lending support facilities announced will be open to non-bank lenders.

The Bank of England publishes statistics relating to lending, which are available at:

http://www.bankofengland.co.uk/statistics/index.htm

These statistics include data on the amount of lending by UK banks, building societies and other lenders.

On 19 January, the Government announced measures designed to reinforce the stability of the financial system, to increase confidence and capacity to lend, and in turn to support the recovery of the economy. These build on measures announced on 8 October last year.

This included a guarantee scheme for asset-backed securities to help improve lenders’ access to wholesale funding markets. The scheme will commence in April 2009 subject to state aid approval. Further details will be announced by the Debt Management Office in due course.

These measures have raised confidence in the banking sector and helped to stabilise financial markets. This is an essential condition for lenders to develop greater confidence to lend in the future to creditworthy businesses, home owners and consumers.

The 2008 pre-Budget report announced that alongside its normal annual plan, the OFT will set out a specific financial services plan.

Ministers and officials meet with a wide range of representatives from the financial services sector including banks, building societies and non-bank lenders.