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Northern Rock aggression 'fuelling mortgage competition'
26/11/09
Edited by Bob Witham. Northern Rock's "significantly more aggressive" pricing and its plans to ramp up gross mortgage lending in order to meet the government's objective of increasing competitiveness in the market is pushing other lenders towards providing more home loans, an expert has said.
Ray Boulger, senior technical manager at independent mortgage broker John Charcol, said the moves have "forced other lenders to have appetites to lend".
He added that Northern Rock's target for gross mortgage lending this year is £4 billion, while its target for 2010 is £9 billion.
"If Northern Rock is going to increase its lending by £5 billion to £6 billion in a market where net lending is only [£8 billion] anyway, that is going to be quite significant," he said.
Earlier this week, the British Bankers' Association said new mortgage lending and loan approvals for residential property purchase both increased in October compared to the previous month.
Gross mortgage lending for the month stood at £9 billion. There were a total of 42,238 loans for house purchase worth £6.1 billion.
