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Objectives are too "conflicting"
Michael Coogan, the director general of the Council of Mortgage Lenders, has voiced his concern at what he said was both “conflicting and incoherent” policies towards banks from the government.
Mr Coogan said that the banks were being pulled in all sorts of directions as they struggled to define their key priorities. The CML released figures that showed there were 52 per cent fewer home loans granted during October 2008 than October 2007. Lenders have become increasingly cautious and have tightened their criteria on almost every type of borrower as the interbank lending has steadily dried up.
Mr Coogan said “To different degrees lenders are facing conflicting pressures to recapitalise against possible future losses, service government’s preference shareholdings at 12 per cent, pay a premium to access the Bank of England Special Liquidity Scheme, show forbearance to borrowers in arrears, follow base rate moves down to help their existing borrowers, keep savings rates high to support existing savers, and provide competitive rates to new borrowers and savers to maintain economic activity in a recession.”
Property prices have dropped 7.4 per cent this October on last October and the average property price having dropped the most in Northern Ireland at 20.5 per cent.
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