Mortgage lenders pledge support for first-time buyers

Mortgage lenders have agreed to continue supporting low-cost housing schemes for first-time buyers, following a meeting with the chancellor and the housing minister yesterday to discuss the credit crunch.

A joint statement issued after the meeting between ministers and the Council of Mortgage Lenders (CML) said: “The CML will continue to support the availability of products compatible with shared equity schemes, which will extend opportunities for people wishing to own their own home.”

In addition, the CML said it was “reviewing” new voluntary initiatives to protect homeowners in difficulty as a result of rising repayments, including “pro-actively identifying at-risk borrowers facing repossession”.

The CML will report to the government by the end of May on the review of voluntary arrangements and codes designed to protect borrowers, as well as a review of the level of information on borrowers facing difficulties.

The meeting follows the action of the Bank of England on Monday to increase liquidity in the UK mortgage market, in response to lobbying by mortgage lenders.

Chancellor Alistair Darling said: “I welcome the arrangements that the industry has in place, and will continue to build upon, to address the concerns of borrowers in difficulty. I hope that lenders continue to take their responsibilities towards customers seriously.”

Michael Coogan, director general of the CML, said: “We look forward to continuing to work with the government to ensure that as few borrowers as possible face the threat of repossession.”

Housing minister Caroline Flint said: “Demand for housing from first-time buyers and young families is high and the fundamentals of the economy are sound. It is important to recognise we are dealing with an entirely different situation in the market from what was experienced in the early 90s.”