Government 'needs to improve' bank lending among homebuyers

Posted: 24 Sep 2010 09:22:34 GMT

The government needs to improve bank lending to homebuyers because they own the banks, it has been observed.

Chief executive officer of Assetz Stuart Law said financial institutions are charging excessive amounts on mortgages.

"They should either admit that they want the banks to be overcharging or they should actually, as the majority shareholder, make the banks lend on better terms," he added.

Mr Law claimed the regime can change the situation and if it does nothing it is because it is "happy" the banks are making a big profit.

The high margins homebuyers are being charged also apply to businesses and enterprises, which are also being starved of good quality lending, he remarked.

According to a study by Autonomous Research published in the Daily Mail, British mortgages are the worst value in the world and charge double the amount in Germany, France and the US.

On average lenders add 2.5 per cent to the cost of borrowing before they loan it to customers, which works out at around £120 a month on a mortgage of £150,000.
 

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