|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Thursday 01st of April 2010
|  Banking  |   Insurance  |   Property  |   Mortgages  |   Economy  |   Investments  |   Credit Cards  |   Debt  |   Loans  |   Pensions  |
February 23, 2009    

Northern Rock returns to new lending at 90% LTV

Bookmark and Share

by Gill Montia
Northern Rock returns to new lending at 90% LTV

Northern Rock is reversing its post-nationalisation strategy of running down its mortgage book and will begin offering new loans of up to 90% of a property’s value.

The move offers hope to the UK’s beleaguered housing market, which despite the recent rise in new buyer enquiries reported by the Royal Institution of Chartered Surveyors and property website, Rightmove, will not see any rise in transactions until mortgage lending frees up.

In particular, the 90% loan-to-value (LTV) mortgage has virtually disappeared as lenders fear further house price falls and a rise in negative equity.

While Northern Rock’s new offering is not aimed at first-time buyers it does offer scope to those who believe prices have bottomed out and this would be a good time to get a foot on the property ladder.

Since its nationalisation a year ago, the lender has focused on repaying its debt to the Bank of England, which it has achieved ahead of schedule.

With a little support from the taxpayer, it will therefore be lending around £5 billion in new mortgages during 2008 and a further £9 billion in 2009.

The Government is still considering another measure that could help return confidence to the market; as recommended by the Crosby Report, it could provide guarantees for residential mortgage-backed securities, which are currently not favourites with investors.

Last week the Council of Mortgage Lenders reported that gross mortgage lending in the UK declined to an estimated £12.4 billion in January.

Discuss this in the Finance Markets forums

Story link: Northern Rock returns to new lending at 90% LTV




Related financial stories to: Northern Rock returns to new lending at 90% LTV:
Previous: « US Government may increase stake in troubled Citigroup
Next: New lobby group wants 100,000 affordable homes »

Visited 2830 times, 2 so far today

No Comments »

No comments yet.

RSS feed for comments on this post.

Leave a comment

Tags: , , , , ,