MI_24-25_regulation.qxd 22/1/09 14:40 Page 2
24 | Regulation
Never a dull
moment
Phil Whitehouse, head of The Mortgage
Alliance (TMA), looks at government
intervention in the current market and
what still needs to be done
T
here is never a dull moment in the government of being reckless will continue As long
financial services at the present to resonate for some time to come. as they
time. As we all contend with need
January's interest rate cut to 1.5 Positive points Darling also
per cent - tipped by a number of In terms of direct effects on the mortgage mar- promised help
economists as temporary staging ket a few positive points certainly emanated to reduce costs
post on its way to a record low from the report. The initial three month period for small busi-
base rate of 1 per cent - we are also still coming demanded by the government before lenders nesses by giv-
to terms with revelations from the Crosby and could initiate repossession proceedings has cer- ing businesses
pre-Budgets reports. tainly been picked up on and has been extend- "as long as they
Of course this is in addition to the continued ed to a six month grace period for borrowers in need" to pay all
government intervention into the welfare of arrears by a growing number of lenders. their taxes. He
some of the country's biggest lenders, increas- Since the pre-Budget report the Prime said that the UK
ing numbers of small businesses – and large Minister Gordon Brown has also unveiled a banks would be
ones for that matter - hitting the wall, growing two-year deferment of mortgage interest pay- encouraged to do
repossession figures, mortgage intermediaries ments for hard working borrowers who experi- all they could to
continuing to struggle and the small matter of ence a loss of income. The pre-budget report help finance small
global economic meltdown and the resultant also pledged to make over £15 million available business. He con-
slump into recession! to fund free debt advice. gratulated RBS for
However, trying to look at things in a posi- Increasing the maximum size of mortgages its recent pledge to
tive light, it is fair to say that the industry's covered by Income Support For Mortgage help SMEs and
reaction to Chancellor Alistair Darling's pre- Interest from £175,000 to £200,000 is also help- warned other banks
Budget report was mixed. The main headline ful, as is the announcement that the govern- that: "this should be the
grabbing revelation had to be the 2.5 per cent ment has allotted £775 million for social rented benchmark to all UK
cut in VAT and the repercussions of such a housing and shared equity schemes and £3 bil- banks".
move have been freely debated across the coun- lion to create more social housing and improve The Chancellor added that seven UK banks
try. Obvious attacks by the opposition accusing motorways and schools. will be allowed access to £1 billion of European
February 2009 Mortgage Introducer
www.mortgageintroducer.com
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