Responses to Northern Rock mortgage boost

Date:Tuesday 24th February 2009
Author: Max Freedman

A mixed response has been given to Northern Rock's announcement that it is to up its mortgage lending.

The nationalised bank said that it is going to lend £5 billion more for home loans this year and £9 billion more in 2010, funded partly by a rise in its government loan.

Michael Coogan, director-general of the Council of Mortgage Lenders, said that any increase to lending supply "is a positive".

He also said that mortgage redemptions had been the main source of the amount of money Northern Rock has repaid to the government and said that relieving pressure on the market could help lenders improve their loan capacity.

But Richard Mason, managing director of, called the move a "hollow PR stunt" and said that it was not likely to be of use to first-time buyers, who are the most in need.

"Northern Rock's downfall was as a result of careless lending in a market where property was over-valued, whereas the new Northern Rock is likely to be over-cautious in an attractive property market," he said.