Chancellor to meet mortgage lenders

Chancellor Alistair Darling is meeting with mortgage lenders to discuss ways to reinvigorate the housing market.

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

Darling told MPs he would meet the Council of Mortgage Lenders today to discuss the plan.

"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," he said.

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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