Minister to host mortgage summit for lenders

Mortgage lenders are set to be hauled before a Government minister to explain why they are still not advancing money to first-time buyers.

Housing minister Grant Shapps will hold a summit on February 15 in which banks and building societies will be asked to explain why lending figures are still so low.

The minister wants to have a "frank and open" discussion about the scale of the problems facing first-time buyers, and why lending to this group is not increasing.

Mr Shapps is particularly concerned that the average age of a first-time buyer who does not receive family help has risen to 37.

The Government estimates that there are 1.4 million households who want to own their own home, but are unable to do so because of the mortgage drought.

Mr Shapps is expected to use the meeting to call on banks to offer more help to first-time buyers, including designing new products to enable them to get on to the property ladder.

These products will include schemes to enable parents to help their children buy their first home, as well as shared ownership initiatives and an increase in the availability of equity loans.

The minister said: "We want to do more to help aspiring first-time buyers - the average age of the first-time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability.

"So I'm calling together key figures from across industry to discuss how we can tackle this problem. This cannot be achieved simply by top-down diktats from government - there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market."

News of the summit comes the day after the British Bankers' Association released figures showing that net mortgage lending fell to an 11-and-a-half year low during December.

New lending by the major banks during the whole of 2010 was 44% lower at £20 billion than it had been in 2009.

Research by the Council of Mortgage Lenders also shows that the number of first-time buyers purchasing a home with a mortgage is running at less than half the level seen during the first half of the previous decade.

Mr Shapps has previously criticised new rules on mortgage lending that the Financial Services Authority plans to bring in, warning that they risk exacerbating an already difficult situation for would-be buyers.