Net mortgage lending set to slip below zero in 2009
A confidential Treasury report has highlighted the potential that net mortgage lending is set to fall below zero in 2009. In simple terms this means that the UK consumer would have paid back more in mortgage payments than they receive in mortgage funding. This would be the first time this situation has occurred during a full calendar year and may mark the time when the UK housing sector changed forever.
A similar recent report highlighted the fact that mortgage lending in October fell by 52% compared to the same period last year and if this is replicated throughout the year the situation would become critical for the UK financial sector. This is the kind of news which is set to dominate the headlines for some time to come and place yet more pressure on Gordon Brown and Alistair Darling to deliver the goods. Even though many believe that Alistair Darling's days at the Treasury are number there is no way that Gordon Brown could make changes at this point in the economic cycle as the handover period could leave the UK rudderless.
The short-term emphasis is sure to concentrate on the UK financial sector and more pressure and potential legal moves could be used to try and extract more liquidity for the general economy.
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