Recently, the government has announced that it is to allow Northern Rock to offer mortgages once again in an effort to stimulate the property market, a move that has caused some controversy.

Some experts believe it is a good move and will help increase competition from other mortgage lenders whilst others are outraged that the nationalised bank should be allowed to re-enter the market before it has paid back its dues to the taxpayer.  Those working in the finance industry, including CeMAP course students and mortgage advisors, will no doubt be pleased at the move.

Now, Northern Rock has confirmed that although it will re-enter the mortgage market its mortgages will be limited to no more than a 90 per cent loan to value, still a generous amount considering the current economic climate and recent falls in property prices, and will not be offering mortgages to first time buyers.

In order to do this however, the bank will be given around £9 billion of state funds.  The Chancellor of the Exchequer claims that as foreign lenders have retreated from the British market and the level of available credit to borrowers is no longer there, the move is vital to inject some much needed liquidity into the market.

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