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According to Michael Coogan, director general of the Council of Mortgage Lenders (CML), a good outcome next year would be if lending remains at 2008 levels, however because of the recession he says this is doubtful.

In his speech to the annual CML conference yesterday (2 December), Coogan said to ensure sufficient lending levels next year, the government, Bank of England and Financial Services Authority need to work together and take coordinated action not "piecemeal, self interested decisions."

Another suggestion from Coogan to the Tripartite system was to help wholesale funded lenders to re-enter the market in order to provide more available mortgage finance now.

He said: "Wholesale funded lenders would be prepared to enter the market again, even if only modestly initially, if they had the right market environment.

"In autumn 2007, we first put forward the proposal which Sir James Crosby has recommended in his recent report to encourage new covered bonds and securitisations, backed by a guarantee, to encourage investor funds into the market.

"We have also consistently pointed out that the deliberate exclusion of wholesale funded lenders from the special liquidity scheme has cut off a number of organisations who might otherwise have been helping to provide new mortgage finance now."

Coogan also criticised the Chancellor's pre-Budget statement that there would be a report back on the Crosby recommendations by the Budget 2009.

He said: "It is simply not good enough - another missed opportunity."

In his speech, Coogan also mentioned that the government needs to address the Income Support for Mortgage Interest weaknesses "as a matter of urgency".

He said: "The government has made an important decision to bring income support for mortgage interest forward to payment by 13 weeks from 39 weeks, with effect from next January. There was a modest improvement in the PBR when the scheme was extended to mortgages up to £200,000.

"However, its failure to provide state support when one borrower’s income is reduced, rather than the household as a whole, means that the vast majority of people who will fall into arrears as a result of unemployment will not qualify for income support."

Coogan concluded that, above all, mortgage rescue and avoiding repossessions is key.

He said: "We must find a way to avoid cases going through the court process, with forced sales and rapid house price falls affecting repossessed properties. I welcome the industry's support for a moratorium to give borrowers time to negotiate a suitable long term solution to short term difficulties.

"However, in addition, after the arrears management process, I believe that a backstop scheme which enables the customer and lender to agree to sell and lease back a property before court action has considerable merits.

"It would resolve the mortgage arrears issue, provide stability and certainty for the consumer and support local communities, as well as underpinning property prices. However, it cannot be done purely as a private sector solution – it needs government support.

"The current government plan to rescue 6,000 households at the risk of homelessness in the next two years is simply not ambitious enough to address the scale of the problem."