The government have announced that Northern Rock intend to do £14bn in new loans by 2011. The new loans will be financed by new deposits, repayments on existing loans and more government money.
The Chancellor, Alistair Darling said this is one of a series of measures being taken to rebuild the banking system. He confirmed “it’s repaid about £18bn of the loan the government made, and I said in January this year that because of the problems the mortgage market faced, instead of looking to wind down its business, it would be better for Northern Rock to maintain lending”.
Industry experts have welcomed the announcement and hope that Northern Rock will provide inspiration to other lenders. It is widely accepted that inter bank lending is necessary for economic recovery, so this news has been welcomed, however general consensus seems to be that the government should be taking more extreme measures and concerns have been expressed over a lack of consistency in their approach.
Northern Rock is to undergo further restructuring but fears exist that existing borrowers will be dealt with in a less generous manner than new business. Some are criticising the government for a complete u-turn on their policy regarding nationalised banks, however the government are convinced this latest step is necessary to stimulate the economy.
The Government was due to announce details of The Home Owner Mortgage Support Scheme today. The scheme was designed to stop people from losing their homes when hit by a sudden change in financial circumstances.
The Royal Institution of Chartered Surveyors have published a survey which indicates that property sales may increase over the next few months. The report suggests that lower house prices have prompted renewed interest in property. Although further signs of recovery are very welcome, the survey confirms that first time buyers still remain largely locked out of the market place.
Figures released last night by the Department of the Environment show that ratepayers living in parts of Northern Ireland will see their rates bills increase by at much as 8.5% in 2009/2010. Homeowners in the Fermanagh council area will see the biggest rise, up by 8.52% on last year.
Oaklee Housing Association have announced a new eco-friendly social housing scheme at Shaftesbury in Bangor. The development will consist of thirty four, two bedroom apartments, boasting a number of energy saving features.