Chancellor meets with mortgage lenders

Chancellor Alistair Darling has met with mortgage lenders to discuss ways to help homeowners who fall behind with their payments.

Darling and Housing minister Caroline Flint met leading members of the industry amid concerns over a steep jump in repayments facing people coming to the end of short-term fixed-rate deals.

The talks followed the announcement of a £50bn Bank of England scheme to allow banks to swap potentially risky mortgage debts for government bonds.

The chancellor was said to be keen to make sure borrowers benefited from the government help to lenders, particularly in the form of lower mortgage rates.

Speaking to MPs on Monday, Darling said:"I will be discussing how banks and building societies can help people whose fixed-rate mortgages are coming to an end, as well as helping people who may get into difficulties in repaying their mortgages."

Mortgage lending has fallen since the start of the financial crisis last summer.

While the Bank of England has cut interest rates by 0.75 per cent in the past five months, many lenders have increased the cost of borrowing to repair balance sheets hit by losses on mortgage-backed investments following problems in the US housing market.

Sue Anderson, spokesman for the Council of Mortgage Lenders, told GMTV it hoped to have a "very productive" conversation with Darling.

"We just want the government to do its bit and we want to do our bit. We want to get the mortgage market back to a more normal situation.

"We do hope getting more money into the system, and the Bank announced yesterday, will free up the system so mortgage rates can become cheaper."

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