Support package 'will ease' mortgage market

The Bank of England's announcement of a support package for the UK mortgage market, initially totalling £50 billion, is a "welcome" move, although it should have come sooner.

That is according to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), who maintained that the "logjam in mortgage funding" would be eased by the scheme.

However, he noted that it would be "relatively restrictive", as the source of funding would not be available to lenders with non-prime packaged assets.

Mr Williams commented: "This move is welcome and should start to ease the logjam in mortgage funding.

"It is important that specialist lenders, along with banks and building societies, with AAA rated mortgage backed assets, will be able to swap them against government securities.

"That does mean that the facility will be relatively restrictive and that lenders with non-prime packaged assets will not be able to tap this source of funding."

Mortgages News posted on 22/04/2008 17:28:55