Britain has been steeling itself for the deficit busting austerity package that the Coalition announced shortly after the election.
Today, Chancellor George Osborne delivered that package intended to find £83bn of savings from government spending budgets.
Mortgage Solutions brings you reaction from lenders around the UK. Find out what the key mortgage firms think and what it could mean for your business.
Council of Mortgage Lenders (CML)
The CML welcomes the extension of the temporary concession on support for mortgage interest announced today.
The £200,000 limit on mortgage size and the 13 week waiting period (down from 39 weeks) will now remain in place until January 2012. According to the government, this will cost £90m over the next two years - a modest sum in the overall scheme of public expenditure, but a reprieve that will come as a relief to those households which, through no fault of their own, lose their income and their ability to meet their mortgage obligations.
CML members who lend extensively to the affordable housing sector look forward to engaging in developing different ways of doing things to support the expansion of private finance. However, the right conditions need to be in place for this to happen in the way the government envisages and this includes strong regulation as well as targeted capital investment and support for individuals through the welfare benefit system.
The British Bankers' Association (BBA)
Decisions taken today will have an effect on the whole industry and, to remain competitive, UK policies need to be in step with those elsewhere. Financial services currently contribute around £24bn in taxes every year, so we are pleased the Chancellor said he wishes to balance taxation with the attractiveness of the UK as a global financial centre and the need to retain jobs.
Alan Cleary, managing director of Precise Mortgages
Now that the government has effectively handed social housing to the private sector, we're destined for carnage if buy-to-let lending continues at the current rate, 80% down on its peak.
There's little sign of it clawing back any lost ground and only a handful of lenders are interested in servicing it - that's nowhere near enough to meet the oncoming tsunami of demand.
The government should have considered this when it planned its cuts to social housing. It must provide incentives for lenders to lend and for professional landlords to invest further in the sector. If the government fails to provide some safety-net for the private rental sector we could be heading for a housing disaster.
Nigel Terrington, chief executive of The Paragon Group
Private rented sector stock is under strain as more people look to rent than buy and this surge in tenant demand is causing rental inflation.
Whilst we recognise the positive regulatory changes already made by the government, it has to be careful not to shift the role of housing people on low incomes onto the private rented sector without ensuring it has appropriate levels of support at both an economic and regulatory level.
Failure to do so could be dangerous, because it could lead to a shortage of rental property at a time of unprecedented levels of tenant demand.
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