The Liberal Democrat's Treasury spokesman has criticised the government's response to the mortgage lending crisis.
The government's response to the mortgage lending crisis has been described as "woefully inadequate" by the Liberal Democrat's Treasury spokesman, Vince Cable.
In its Pre-Budget Report, launched last week, the government announced measures to force lenders to wait three months before beginning repossessions. With many struggling in the face of rising household bills and a slowing economy, it was billed as an attempt to help people in danger of falling into arrears.
However, Mr Cable told the Council of Mortgage Lenders (CML) conference yesterday (December 2nd) that the "proposals on repossessions are woefully inadequate". He went on: "The Government's mortgage rescue plans cover only 6,000 households, according to the CML, despite the fact that 170,000 households are estimated to have been in arrears for more than three months."
Mr Cable said that the government should enforce business practices on its nationalised and semi-nationalised banks, with a view to "[restoring] faith in mortgage lending". He suggested that "safe, simple and cheap" mortgages could be provided by insuring them via the market for five years to cover everything except deposits.
Tomorrow, the Bank of England's Monetary Policy Committee will announce whether or not the base rate of interest is to be reduced. Many are hoping that if it is, it will be passed on to consumers by reducing their mortgage repayments.
