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First-time Buyers

Royal Bank of Scotland to increase lending

paulajohn
Written By:
paulajohn
Posted:
Updated:
22/07/2013

RBS plans to up its mortgage lending by 50% over the next few years, it has revealed.

The Royal Bank of Scotland, which is 82% owned by the State, has said that it intends to increase the amount of mortgages it lends out substantially.

In 2011, the most recent year for which figures are available, the Council of Mortgage Lenders estimated RBS controlled 10.4% of the overall mortgage market.

Head of home lending Moray McDonald told The Guardian the 50% planned increase was a multi-year goal: “With the franchises we have in RBS and NatWest I would be really happy to see our share grow to the mid-teens.”

The UK’s fifth biggest lender has launched an advertising campaign aimed at would-be borrowers and has been advising the government on the second part of the Help to Buy scheme.

McDonald said he was confident the scheme would be adopted on a large scale by lenders and push lending above the 90% loan-to-value ratio. He said: “There is obviously a risk of [the market] overheating. But the government is looking to pull forward borrowing that would have taken place anyway in a few years’ time. If this means someone is able to get on with their lives, rather than wait, that will be a good outcome.”

However, the question of whether lenders will need to ramp up capital in order to meet regulation requirements as well as paying a fee for the mortgage guarantee still needs to be addressed, he added.