Executives from major banks will ask the chancellor to extend a home loan guarantee program that is set to expire at the end of the year.
The largest mortgage lenders in the United Kingdom will push the chancellor to extend a government program that helps first-time buyers get on the property ladder.
Officials from major banks and Britain’s largest building society, Nationwide, will persuade Kwasi Kwarteng to prolong the Mortgage Guarantee Scheme, which is set to expire at the end of the year.
Launched in the spring of 2021, the program allows lenders the option to have losses on mortgages exceeding 80% of the selling price insured by the government.
The request to extend the program will be on the agenda of the banks as they and the Treasury attempt to remedy the disturbance in the mortgage market caused by Mr. Kwarteng’s mini-Budget last month.
Lenders will also emphasize the necessity for financial market stability to correctly price home loans, as well as the hazards associated with agreeing to unaffordable mortgage loans under the City watchdog’s new “consumer duty.”
In the past two weeks, banks have canceled or suspended hundreds of mortgage transactions due to volatility in the pricing of such loans.
The chief executive of the City watchdog stated over the weekend to The Sunday Times that he wanted lenders to justify the removal of fixed-rate mortgage products.
Nikhil Rathi told the newspaper, “If a product is temporarily withdrawn, we want to know when it will return to the market so that those who may need to refinance can move through with their plans.”
Executives from Barclays, Lloyds Banking Group, and NatWest Group are expected to participate in the discussions on Thursday.
According to a Treasury source, UK Finance, the bank’s trade organization, will also be represented at the conference.
