The Government plans to inject up to £14bn into the UK mortgage market through nationalised lender Northern Rock, ministers have announced today.
Northern Rock will make an additional £5bn in loans during 2009, with a further £9bn in 2010.
Loans will be available for up to 90% of a property's value, but there is unlikely to be a return to mortgages of 100% or more after the Prime Minister condemned them as 'foolish' this weekend.
The loans will be financed by a mix of new deposits, repayments of existing loans and Taxpayers' money.
Before today's announcement, Northern Rock had been winding down its mortgage book, lending out less money than was being repaid and was reported to be particularly swift to seek a possession order for homeowners who could not keep up with repayments.
The Conservatives say the decision shows the Government is in 'chaos'. Shadow Treasury Minister Greg Hands says: "I think there will be a contrast between existing customers who are facing repossession and all these thousands of new customers who are getting very generous terms."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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