Bank bail-out to help with lending
New rescue package to help bank’s start lending again. Gordon Brown will announce plans to guarantee mortgage lending tomorrow. Will this be the news first time buyers have waiting for?
Banks need to start lending again to prevent the housing market sliding further. With little or no confidence in house prices most buyers are sitting on the fence waiting for prices to stabilise before they risk purchasing their next house. This is unlikely to happen until credit becomes available again.
There is hope that the Governments new attempt to stimulate the mortgage market will prevent the housing market crashing even further. Ever since securitisation collapsed in 2007 lending has dried up all but for a few customers with the best credit records and a large deposit.
The new bail out package which has been recommended by ex-bank boss Sir James Crosby is specifically aimed at boosting the mortgage market. This in turn would help property prices stabilise. It’s the shortage of affordable mortgage loans that is contributing to the slide in house prices. First time buyers have been priced out of the market.
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