You may have read last week how an increasing number of loan providers are withdrawing from the new lending market, particularly through loan brokers and financial intermediaries.

Most recently, the Halifax stopped offering unsecured loans via brokers and white label loans became the latest lender in a long list of providers to withdraw from the secured loan market altogether. This has the effect of limiting the level of advice and service which can be provided by an independent loan broker, which in turn means it is more difficult for a borrower to obtain the best loan deal to suit their personal circumstances.

But now, Loan Options, a specialist secured loan packaging company who deal exclusively with loan brokers and intermediaries, have introduced a new packaging service specifically designed to help brokers, particularly those who may have had their existing agencies with lending organisations cancelled, to be able to place applications with a wider range of secured loan providers, which they may not otherwise have been able to access through the more traditional route of a direct agency.

Furthermore, Loan Options will provide a bespoke service to its brokers, allowing them to do as much, or as little of the work on each case as they would like, depending on their own particular level of involvement with the case.

Andy Moody of Loan Options said “We believe that today’s market requires the ultimate in flexibility and that is what Loan Options is now offering. This is an evolutionary step for the market and offers the ultimate bespoke service based on the individual needs of every intermediary. Loan Options is all about choice and this is the next evolutionary step up from traditional satellite arrangements.”

This service should offer secured loan brokers and intermediaries access to a wider range of lenders for their clients, which ultimately means that the person applying for a loan ends up getting the best possible deal available to them.

The latest figures from the National Landlords Association (NLA) have shown that there has been a significant increase in the number of people who are now looking to rent property rather than applying for a homeowner loan and buying.

Not surprisingly, the reason given for this is due to the current lack of available funding through mortgages and homeowner loans, as banks and building societies continue to restrict their lending criteria, despite increasing pressure from the Government.

The other main factor which is putting off prospective home owners is the continuing depreciation of house prices, which according to the latest figures from the land registry, have fallen by 8 per cent over the course of the last twelve months.

Although the demand for rental property has increased, having the effect of making rents more expensive and almost comparable with the cost of making repayments on a homeowner loan or mortgage, the availability of rental property has also increased, as many people who have been trying to sell their properties over the past few months have simply given up on the idea until the market returns, deciding instead to let their existing home to allow them to be able to move.

Although banks and building societies are being particularly cautious about who they will offer a secured loan to at the moment, the main obstacle for potential buyers is the amount of deposit they require, as the most competitive loan deals at the moment usually only allow around 60 per cent loan to value.

Meanwhile, Steven Hilton of the NLA has issued a warning to those individuals renting out their homes instead of selling, advising them to ensure that they comply with all the regulations for letting property. He said “This can lead to problems as inexperienced landlords, who take a short term view to letting their properties, could find themselves out of their depth.”

For many months now, those individuals and organisations working in the housing and home owner loan business, have been holding their breath waiting for the long overdue report from Sir James Crosby into the state of the mortgage and home owner loan industry and his recommendations to try and start some recovery into the ailing markets.

The report was originally due to be released at the end of September this year, but has taken until this week to see the light of day.

The final report was published on Monday this week (24th November) alongside the Chancellor’s pre budget report and the main recommendation was that the Government should intervene in the mortgage loan markets and offer a guarantee of £100 billion in mortgage-backed securities, to be auctioned over the course of 2009 and 2010.

This would remove the risk of lending away from banks and building societies and instead place it with the Government, allowing lenders to be able to offer new secured loans to borrowers at reasonable rates, and restore the home owner loan market.

He also said in his report that due to the current economic situation, lenders were unwilling, or unable to offer loans and without Government intervention on a significant scale, the amount of net lending on home owner loans could fall to zero over the next two years.

Of course, none of this comes as any great surprise, as this was originally suggested in Sir James’ interim report which was published in July this year. We now need the Government to take practical action sooner rather than later, if the current situation in the secured loan market is to improve at any time in the near future and also ensure that these benefits, along with recent and future interest rate cuts, are passed on to those individuals with home owner loans by banks and building societies.

In a speech yesterday, the Chancellor of the Exchequer, Alistair Darling, announced several measures which have been designed to help the economy and provide additional protection for those individuals who are struggling to keep up with the repayments on their mortgage or home owner loan.

The announcements came as part of the pre budget report form the Chancellor, which will see the Government borrowing record amounts in order to try and give a boost to the UK economy and those with secured loans on their homes.

The plans include setting aside £15 million to provide a free debt advice service for those borrowers who may be facing financial difficulty with their secured loans and other debts, along with extra benefits for those losing their jobs by extending the Income Support for Mortgage Interest scheme to cover home owner loans of up to £200,000.

Banks are also set to receive an additional £100 billion through an extension to the Governments recapitalisation scheme as early as next month and according to the Chancellor, the major banks have agreed to allow customers with secured loans up to three months arrears before they commence repossession proceedings, also the regulation of the banking system will be made “drastically” more effective.

Mr Darling also announced that VAT would be cut to 15 per cent from next week, in an attempt to encourage people to start spending on the high street again, although stamp duty will remain on property purchases, which many people have been calling on to be abolished.

Whether or not these changes will have any impact on the economic crisis remains to be seen, but many experts claim that the only way to restore the economy is to enable the banks to ease their lending criteria and start offering loans to customers once more. Hopefully the cash injection into the banking system will help this process, but banks need to be forced to pass these benefits on to their loan customers.

As the current gloomy economic situation continues and looks as though it is likely to get worse before it gets better, the total number of home owner loans and mortgages in arrears in the UK has increased again, according to the latest figures from the Council of Mortgage Lenders (CML).

The report from the CML has shown that the total number of home owner loans currently with three months or more arrears, rose by 8 per cent over the three months to the end of September, to stand at a total of 168,000, compared with only 155,600 three months previously and the CML have said that the figure is likely to exceed their original forecast of 170,000 cases by the end of the year.

In line with arrears cases, the total number of homes being repossessed, due to a build up of arrears and defaults on home owner loans, has also increased by 12 per cent to 11,300 cases in the three months to the end of September, against 10,100 cases in the previous quarter.

Despite these figures, the CML have maintained their prediction of 45,000 repossession cases by the end of the year and have called on the Government to offer more support to home owners who are struggling to maintain their loan repayments.

Michael Coogan of the CML said “The CML and lenders are committed to ensuring that repossession is only ever a last resort. Most borrowers who face payment problems successfully keep their home by working with their lender – anyone worried about mortgage payments should contact their lender at the earliest opportunity, before arrears start to build up.

The Government has taken some helpful steps towards targeted support for some of the most vulnerable households, but with a worsening economy now needs to make it a priority to go further. Increased help with housing costs is needed for a wider range of borrowers facing unforeseen repayment difficulties where there would otherwise be little prospect of early improvement.”