“The Financial Policy Committee’s recommendation that HM Treasury allow it to direct – if necessary – the Prudential Regulation Authority and the Financial Conduct Authority to require lenders to place limits on residential mortgage lending are an inevitable consequence of the Chancellor announcing in June that he wanted to grant the FPC additional powers to guard against financial stability risks from the housing market.
“However, with the mortgage market still finding its way back to normality after the tribulations of the global financial crisis and consumers currently adjusting to the new MMR regime, we need to be careful to ensure the sector’s recovery is not stifled by over-regulation. It is reassuring that the powers that be are attempting to prevent the mortgage market making some of the mistakes it made before the crash, but lenders must be still given some legroom to be creative and flexible in their attempts to help consumers.
“Loan-to-value ratios and debt-to-income ratios are obvious targets for the regulators, but we must sure the green shoots of recovery are given room to grow. It is also good news that the FPC is evaluating whether the parameters of the Help to Buy scheme remain appropriate as we need to ensure that the initiative isn’t artificially skewing the market.”
For further information please contact:
Barney McCarthy/ Will Muir, The Wriglesworth Consultancy
Tel: 0207 427 1405 / 29 / Email: firstname.lastname@example.org
Notes to Editors
The Intermediary Mortgage Lenders Association (IMLA) is the trade association that represents mortgage lenders who lend to UK consumers and businesses via the broker channel. Its membership of 43 banks, building societies and specialist lenders include 18 of the 20 largest UK mortgage lenders (measured by gross lending) and account for about 90% of mortgage lending (91.6% of balances and 92.8% of gross lending).