24 Feb

Northern Rock move 'will help all lenders'

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.

Cookies We use cookies to ensure that we give you the best experience on our website. To find out more about our cookies policy, see our cookies policy here or in the footer.