Northern Rock is to offer £5 billion of new mortgage loans this year, with a further £9 billion to come over period to 2011. The funding for this move comes partly from government (though much comes from repayments and deposits that have come in to the bank). It had originally been intended that the bank would not issue new mortgages, so this represents a major attempt to inject new resource into the housing market. As such the move is very welcome.

The housing market is not the only one in which credit has been constrained, though. Businesses need loans too, and action is still needed to ensure that they have access to funds. Many of the finer details of the second banking bailout will be published later this week, and hopefully there will be some relief for businesses there.