Mortgage market needs Northern Rock to return "relatively aggressively"

Date:Friday 12th June 2009
Author: Max Freedman

Mortgage lender Northern Rock needs to return to the market "relatively aggressively" in order to encourage other lenders to offer more competitive deals, it has been claimed.

According to Andy Pratt, chief operating officer at Alexander Hall, lenders want to offer more competitive deals but are concerned that they will receive criticism in the media for re-introducing more high-risk lending.

The return to the market of Northern Rock would "loosen the shackles" and enable other industry operators to feel more confident about providing higher loan-to-value ratios, he added.

Mr Pratt stated: "The lenders will look at that and then think: 'If they can do that then we'll compete, because we want that type of business'."

The latest figures from the Bank of England suggest that the average interest rate on a 75 per cent tracker mortgage was 3.99 per cent at the end of May, compared with 3.86 per cent in April.