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Saturday 07th of November 2009
January 4, 2008    

Secured lending levels remain steady

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by Gill Montia

The Council of Mortgage Lenders (CML) has issued a report in which it describes the demand for secured lending as remaining “fairly steady”, despite some volatility in the market.

The statement is in response to the Bank of England’s most recent credit conditions survey, which according to the CML shows that some overly pessimistic predictions about the default rate on secured loans are not accurate.

However, the Council points out that where repayment difficulties have occurred, the amount of money lost by lenders has been higher than anticipated.

The report also confirms the CML’s predictions of a slowdown in the lending market during 2008 and “other evidence of worsening market sentiment”.

Last month the Council urged the Bank of England to intervene more aggressively to bolster liquidity, stating that: “the residential mortgage backed securities (RMBS) market remains effectively closed, with no imminent sign of re-opening. In the wake of the US sub-prime mortgage crisis, many investors are showing an aversion to RMBS markets globally”.

In October of last year, the CML forecast that house prices would rise by 1% in 2008.

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