BSA responds to mortgage market review
Commenting on the FSA’s discussion paper on the Mortgage Market Review, Paul Broadhead, Head of Mortgage Policy at the Building Societies Association, said:
“While much of the detail in the paper is sensible, we have significant reservations about the possible unintended consequences of some of the ideas expressed. We need a sensible balance between appropriate regulation and allowing people to buy their own home when they can afford to do so.
“The vast majority of the British population aspire to home ownership and these proposals must not frustrate the sensible ambitions of potential homeowners.
Affordability
“We are pleased that the FSA is not setting maximum loan to income or loan to value ratios. We welcome the FSA’s recognition that lenders need to focus on borrower’s levels of disposable income.
“However, while we believe this is a sensible approach, we remain concerned about how the FSA will implement these requirements in practice.
“We believe that home ownership is something that should be encouraged, and it is vital that lenders retain the flexibility to respond to the very individual financial circumstances of individual borrowers.
Non Deposit Taking Lenders
“We also welcome the FSA’s commitment to examine the extension of its prudential rules to non deposit taking lenders. This would represent a significant levelling of the playing field, and building societies welcome the opportunity to compete fairly with such organisations.
Non-Income Verified
“We have always regarded self certification mortgages as a niche product for a very small group of borrowers, and don’t believe that such mortgages should have reached a market share of anywhere near 45%.
“However, such products are suitable for a minority of people, and an outright ban is not appropriate.”
Notes to Editors:
1.Paul Broadhead is available for further comment and interview both on these issues and all other issues contained in the FSA Discussion Paper via the BSA Press Office.
2.Photographs of Paul Broadhead are available from the BSA press office, or from the Association’s website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
3.The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 52 UK building societies. Building societies have total assets of over £370 billion and, together with their subsidiaries, hold residential mortgages of over £245 billion, more than 20% of the total outstanding in the UK. Societies hold nearly £240 billion of retail deposits, accounting for more than 20% of all such deposits in the UK. Building societies also account for about 36% of all cash ISA balances. Building societies employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
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