CML Supports FSA Mortgage Lending Reform

The Council of Mortgage Lenders (CML) has said that it is pleased with the proposals for reform on mortgage lending put forward by the Financial Services Authority (FSA).The FSA this week outlined new stricter lending rules which it hopes will prevent banks and building societies granting mortgages to people which cannot afford the repayments or allowing them to take reckless measures such as interest-only mortgages without a suitable repayment vehicle.

Initially, the CML said that it had concerns that such restrictions, which will come into forced in 2013, would hinder the market and further reduce people’s ability to acquire.But, after consultation with the FSA, it is satisfied that the changes are a positive move for borrowers and the housing market.

CML director general Paul Smee said: "If lenders are to make their contribution to improving the supply of housing and to the wider agenda for economic growth, then they need a regulatory framework which also supports that objective."

Despite the changes, EH Landlord Services have predicted that the housing market will remain strong for the next decade at least.

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