Labour must force its banks to lend.
Posted on March 9th 2009
Mortgage Strategy: Alan Cleary’s column.
Managing Director
ast Monday’s news that net lending from the mutual sector was in negative territory should be of little surprise. Most industry predictions for 2009 is that net lending will be negative to the tune of about £25bn as people delay getting on the housing ladder until house prices settle. Therefore, negative net lending statistics form mutuals as well as the banks will be the norm over the next 6-12 months. What is clear is that the government will need to help stimulate the market by using the taxpayer’s share in Lloyds, B&B and RBS to make the banks take up the slack, even though they will not want to. The three banks were at their peak responsible for more than 30% of the entire UK mortgage market and without them there is little hope of avoiding negative number in 2009.
Halifax should get back to what it is good at, residential loans at higher LTVs especially first time buyers. BMS should be lending to private landlords who have been improving the supply of rented accommodation whilst the government has done little if anything to improve social housing. It is unlikely Intelligent Finance can add any value. BoS should replenish lending to self employed people who have been left high and dry. Lloyds/C&G should focus on remortgaging home owners and RBS should focus on business lending.
With a general election coming up within 14 months the Labour Party needs to take decisive action quickly or end up on the scrapheap itself.
