The Council of Mortgage Lenders (CML) has demanded the Government bring to an end the "conflicting and incoherent" demands being placed on lenders.
Michael Coogan, director general of the CML, says lenders are facing too many conflicting pressures, including to recapitalise against future losses, show forbearance to borrowers in arrears and provide competitive rates to new borrowers.
"Current policy objectives are conflicting and incoherent," he says. "The Government needs to decide on its key priority. The tug of war with lenders being pulled in every direction at once needs to end.
"We believe the Government urgently needs to review the cumulative effect of the approach it has taken in the recapitalisation process on large lenders' willingness and capacity to lend."
The body's comments follow the publication of the latest lending statistics by the trade body, which revealed there were 39,900 house purchase loans in October, worth £5.5bn - an increase of 14% in volume and 10% in value from September, but an annual decline of 52% on volume and 57% on value.
There were 70,000 remortgage loans worth £9.4bn, an increase of 12% in volume and 11% in value from September and a decline of 31% in volume and 28% in value from October 2007. Gross lending rose to £18.6bn, up 6% from September but 44% lower than October last year.IFAonline
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