HSBC set to boost the mortgage market

The government has welcomed news due to be announced today which will see HSBC pledge to increase the amount it lends in 2009.

Mervyn King, the governor of the Bank of England, recently said that getting banks lending again was the most pressing challenge facing policymakers, while government ministers have been working to encourage building societies and banks to resume lending to assist the housing market.

This week, banks will face increasing pressure from the chancellor, to pass on the recent interest rate cuts to help the market recovery.

John McFall, chair of the Treasury select committee, said: "I'm extremely pleased to see HSBC's initiatives this weekend. Making money available for lending is one of the most important economic issues facing us today."

Although HSBC has traditionally been a minor player in mortgage lending, over the past year, the bank has been among the most aggressive lenders, as well as being in better financial condition compared with many other lenders. Last week, the bank was among the few lenders to pass the full 1% interest rate cut on to its customers.

The latest news means that in 2009, HSBC, which has 350,000 mortgage customers in the UK, is planning to increase its mortgage fund to £15bn - nearly double the £7.8bn it lent last year, and an increase of 20% on 2008. The bank said that this was an opportunity to increase its market share and that it had no intention of closing its doors to customers.

The lender is the only high street bank in the UK which has not been forced to take taxpayers' money or to raise new funds from its shareholders.

Source: guardian.co.uk | Last updated: 8th December 2008

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