Plans by HSBC to increase lending to UK homeowners by a fifth are expected to give a welcome boost to the beleaguered mortgage market, it has been revealed.

The banking giant will almost double its level of lending in 2009 by offering up to £15 billion in mortgages during 2009, an increase of of 20% on last year. HSBC said it remained open for business, but insisted it would not comprise its lending standards.

The announcement comes amid forecasts that frozen money markets and the slump in the housing market will result in repayments and redemptions outstripping lending next year.

Paul Thurston, HSBC's UK managing director, said: "By some estimates, net mortgage lending in the UK will fall next year, but HSBC has no intention of closing its doors to customers, nor will we compromise our reputation for responsible lending. We remain open for business to the tune of £15 billion."

HSBC recently announced it was making £1 billion of extra funding available to support small businesses in Britain through the recession.

The move was welcomed by ministers who have been calling for banks to resume lending to firms pushed to the brink of collapse as credit dries up.

HSBC, which did not take up the Government's bank bail-out funding, passed on the full benefit of last week's 1% base-rate cut to retail and business customers.

HSBC is a growing force in the UK mortgage market after lending £7.8 billion in UK mortgages in 2007 and £12.8 billion this year.

It said the extra cash for small business came from a $5 billion (£3.3 billion) global working capital fund for small and medium-sized enterprises.

The bank said that the fund would supply working capital to help firms with their cash flow needs and provide credit to customers with "fundamentally sound businesses" to help them "weather short-term shocks caused by the downturn".

It said that the fund represented new money over and above what the bank would normally expect to lend in the current economic environment and would be allocated on a "case-by-case basis" using HSBC's normal lending criteria.

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