CML: Savings inflow is not sufficient for healthy mortgage lending

Date:Monday 12th January 2009
Author: Susanna Kavka

Income for banks and building societies through savings is not enough for adequate mortgage lending, it has been claimed.

Sue Anderson, head of member and external relations at the Council of Mortgage Lenders (CML), said that while the inflow of savings is "holding up", it is "not sufficient to maintain a flow of lending to the extent that would be a more normal market".

Ms Anderson explained that more funding is needed to enable lending but said that low interest rates make this difficult.

She called on the government to take swifter action in carrying out the recommendations of the Crosby report.

Commenting on the effective closure of securitisation markets that had propped up mortgage lending in the UK, Ms Anderson said: "There's very little going on in terms of any off-balance sheet transfer of assets at the moment to support a flow of new lending in that sense."

According to data from the CML, 83,000 home loans were approved in October 2007, compared to 40,000 in the same month last year.