PRESS DIGEST - Financial Times - April 16

BANKS GIVE BROWN MORTGAGE WARNING

Heads of Britain's leading banks told Gordon Brown on Tuesday that unless the government intervenes to break the logjam in the financial markets, dozens of smaller building societies could be forced to stop offering new mortgages.

At a summit at Downing Street, bank executives said that without intervention only a handful of larger banks would control the market.

"The big banks said: 'You've got to think about this,'" said one person present at the meeting. "We're going to take 100 percent of the market."

The warning came as the Bank of England was finalising proposals to ease the markets by taking over mortgage loans that are stuck on banks' balance sheets, raising hopes of an intervention.

HOUSE PRICES FALL BY 1.6 PERCENT

Official data released on Tuesday showed a 1.6 percent fall in house prices in February. According to the figures from the Department for Communities and Local Government, the average cost of a home by the end of the month was 217,737 pounds ($428,400), its lowest level since last June.

Flats fell by 2.9 percent, detached properties by 1.5 percent and terraced homes by 1.1 percent. Although the DCLG figures are seen as more reliable than those of lenders such as Halifax and Nationwide, they lag several months behind them and as such may underestimate the extent of the slowdown.

'PROBLEM DEBT' HITS 25 BILLION POUNDS