Bank of England promises more mortgage help

15 September 2008

Bank of England Governor Mervyn King today announced that a new lending scheme is being put together to ease the liquidity crisis at the heart of the credit crunch.

The current Special Liquidity Scheme – designed to sustain lenders’ abilities to offer mortgages and other loans – is due to run out in October.

Mervyn King told MPs that the Bank of England would continue to provide affordable funding to the banking sector after this date.

He also briefly mentioned plans for a "permanent liquidity insurance scheme" – a long-term expansion of some of the measures introduced by the Special Liquidity Scheme.

But King was eager to warn the Treasury Select Committee that the Bank of England could not kick-start the mortgage market alone – implying that other more fundamental factors, such as confidence amongst lenders and rising costs of living, would also need to be addressed.

A spokesperson for Think Money commented: "This news will be a relief to those hoping to take out a mortgage in the next few months.

"Despite the trouble in the housing market, lower prices could mean now is a good time to buy – and these measures should help ensure that a good range of mortgages are still available."

---

Think Money offers a range of mortgages to suit different financial situations. To find out more, click here.

Our initial advice on your best financial solution is free. Fees payable when continuing service is provided. Calls may be recorded for training and quality purposes.