Mortgage lending 'must become more lenient'

21 June 2010

Written by Steve Olejnik

The lending criteria of mortgage providers must become more lenient in order for the housing market to increase in strength, one organisation has said.

With many people who should be able to purchase property unable to do so, the government must work with lenders to make home loans more accessible, according to the National Association of Estate Agents (NAEA).

Calling to the leaders ahead of the Emergency Budget, the body has proposed three pledges that it would like to see Mr Osborne include.

As well as ensuring restrictions on lending are sensible, it would also like to see a review of stamp duty, which it says has a "dampening effect" on the market.

"This government has already begun to tackle this issue by raising the threshold to £250,000. Now is the time to go further and review the fundamental inequalities at the heart of this tax," chief executive of the organisation Peter Bolton King said.

The Council of Mortgage Lenders has also called on the authorities to offer more support to the industry in response to speculation that the Bank of England may put a cap on home loans, which it said may not be addressing the problem since risk-averse financial institutions are currently less likely to lend irresponsibly.

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