He said the decision should now help to kick-start the struggling housing market, and that home buyers could start to breathe a cautious sigh of relief. “This news from the Government is a real step forward, after many months of doom and gloom, and everyone is hoping it’s the first of many positive announcements.”
The state-owned bank, which was nationalised in 2007 with £27 billion worth of government support, initially had to rid itself of mortgage customers in order to repay the Government. This policy has been so successful that Northern Rock has reduced its outstanding loan to £9 billion.
Now the bank will be split into two divisions with one managing existing customers, and the other offering mortgage finance to new customers. Proposed figures show that new lending will be in the region of £14 billion by the end of 2010.
Paul said: “Government advisers have made it clear that the new lending from Northern Rock will be on commercial terms, to ensure it represents good value for money for the taxpayer. And their decision to allow the bank to return to the mortgage market is a positive sign that the difficult conditions are hopefully beginning to ease.
“Good news like the Northern Rock announcement can only help to boost the industry, and let’s hope it’s a sign of even better things to come.”
PMK Mortgages (www.pmkmortgages.co.uk) offers independent mortgage advice for a wide range of clients across the county and beyond.