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Lenders push Chancellor Kwasi Kwarteng to extend mortgage guarantee scheme | Business News



The UK’s biggest mortgage lenders will urge the prime minister to expand the government’s home loan initiative, which aims to give first-time home buyers a chance to access property.

Sky News understands that executives from major banks and Nationwide, the UK’s largest construction organization, will ask Kwasi Kwarteng to commit to extending the Mortgage Guarantee Scheme, which is due to expire on Monday. Last year.

Launched in spring 2021, the program gives lenders an option to guarantee through the government for losses incurred on mortgages over 80% of the purchase price of a property.

Requests to extend this program will be part of the banks’ agenda as they and the Treasury seek to address disruptions in the mortgage market following Mr Kwarteng’s ‘Small Budget’ last month. .

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Lenders will also emphasize the need for stability in financial markets to price home loans reasonably, and will flag potential risks under the new ‘consumption obligation’. from the City’s supervisory authority from agreeing to default on mortgage loans.

Hundreds of mortgage contracts have been withdrawn or frozen by banks in the past two weeks due to volatility in how banks price such loans.

The CEO of the City watchdog told The Sunday Times over the weekend that he wants lenders to justify withdrawing fixed-rate mortgage products.

Nikhil Rathi told the newspaper: “If a product is recalled for a temporary period, we want to know when they will return to the market so that those who may need refinancing can continue with the plan. their.

Executives from Barclays, Lloyds Banking Group and NatWest Group are among them is expected to attend the talks on Thursday.

UK Finance, the banking trade association, will also be at the meeting, according to a Treasury source.

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