CML comments on government financial package

Date:Tuesday 20th January 2009
Author: Max Freedman

The Council of Mortgage Lenders (CML) has given its initial response to the government's new financial package.

In a statement, the organisation welcomed the changes made regarding Northern Rock's repayment strategy, which it said would help the mortgage market.

The CML explained that the reductions in Northern Rock's mortgage book had a detrimental effect on the market but said that the changes announced by the Treasury should help to revive the market by bringing more money to home purchases instead of remortgages.

CML director-general Michael Coogan stated: "At long last, the government has announced a comprehensive and co-ordinated package of measures sufficiently large in scale to have an impact on improving the flow of lending."

But he added that the "devil will be in the detail" and warned that the effects may be disproportionate in some areas.

Among the measures announced by the government, intended to help revive lending, is the creation of a new scheme for asset-backed securities.

There is also a new system to protect banks' capital and assets.