For immediate release: 19 September 2008
Peter Williams, executive director of IMLA, responds to the Bank of England’s decision to extend the term of its Special Liquidity Scheme:
“While the Bank’s decision to extend the SLS term for most lenders is to be welcomed, this move does little to improve the current state of liquidity in the mortgage market. Lenders might be able to clear their balance sheets of old debt, but the problem our mortgage market faces is a lack of new debt finance. With such turbulence in the wider market, LIBOR has moved up again, having already reached a seven year high this week. Banks are unable to help themselves in these conditions, and the strength of our economy depends in part on their health. The Bank of England can neither afford to ignore this nor continue to oppose government support, not least with respect to the wider financial stability agenda.
The Special Liquidity Scheme still excludes lenders which do not take deposits, preventing a large proportion of the mortgage market from moving the assets already on their balance sheets. The intermediary sector is responsible for nearly 80% of all new mortgages – it’s madness to rule out a large number of intermediary lenders from accessing the Bank’s funds when mortgage finance is so tight. Even if the Bank persists in offering no support to lenders making new loans, IMLA would strongly urge the Bank of England to reconsider which lenders the Special Liquidity Scheme is available to in order to create a level playing field.”
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For further information please contact:
Brian Thorn / Sarah Davidson, Wriglesworth Tel: 020 7427 1400
NOTES TO EDITORS
IMLA is the specialist trade body representing the interests of lenders who market their products primarily through brokers, rather than direct or through a branch network. The sub prime market makes up around 8% of the UK mortgage market and had a value in excess of £20 billion in 2005. Alongside that market is the self-certification market making up a further 10% and with a value in 2005 of around £30 billion. Both sub-prime and self-certification loans are almost exclusively sold via brokers rather than direct through lenders’ branches. Currently over 60% of mortgages are sold through intermediaries and this market continues to grow.
IMLA provides a unique opportunity for senior industry professionals to meet on a regular basis to discuss key current initiatives and contribute actively through IMLA and other fora such as the Council of Mortgage Lenders.
IMLA was formed in 1988 as the Association of Mortgage Lenders and was instrumental in the creation of the CML. It changed its name to IMLA in 1995. Subsequently IMLA helped bring the Association of Mortgage Intermediaries (AMI) into being and was instrumental in bringing the mortgage advisers qualification CeMAP to fruition.
More information can be viewed at the IMLA website www.imla.org.uk.
IMLA Management Committee 2008
Chairman
Godfrey Blight
Managing Director, Sales & Marketing
GMAC-RFC Limited
Directors
John Heron
Managing Director
Paragon Mortgages Limited
Paul Howard
Director
Nationwide Specialist Lending
Colin Shave
Chief Executive Officer
GE Money Home Lending
Bob Young
Managing Director
CHL Mortgages
Executive Director
Peter Williams