The mortgage market has received good news following an announcement by HSBC that it will increase its lending by a fifth.
HSBC is to boost its mortgage lending by 20 percent next year, providing welcome relief for the beleaguered property market.
The bank has already pledged to pass on last week's Bank of England base rate cut to consumers and businesses in full. Because of the cut, the Bank's rate is now at two percent, as low as it has ever been in the institution's history.
HSBC's latest decision means that 2009 will see up to £15 billion in mortgages being lent by the company, up by a fifth on this year and nearly double that of 2007. Many outlooks for the mortgage market next year had been extremely negative. The director general of the Council of Mortgage Lenders Michael Coogan predicted that 2009 will see poorer mortgage availability than 2008, unless the government provides assistance.
However, HSBC's UK managing director Paul Thurston said: "By some estimates, net mortgage lending in the UK will fall next year, but HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending. We remain open for business to the tune of £15 billion."
The company appears to be listening to the government, which has asked banks to help consumers and businesses alike. It also revealed on Saturday that it would be making £1 billion of funding available for small businesses during the forthcoming recession.
