FSA Plan To Rein In Excessive Lending

According to the Council of Mortgage Lenders, house prices are likely to fall considerably if the Financial Services Authority’s plan to restrict ‘excessive’ lending is approved. The FSA are proposing, amongst other measures, to restrict lending to those who cannot provide any evidence that they can afford to repay the debt, which it believes continues to pose a serious risk to long-term economic stability, pointing to the first 3 months of 2010, which saw non-verified loans make up 43% of all approved mortgages.

According to the Council of Mortgage Lenders, house prices are likely to fall considerably if the Financial Services Authority’s plan to restrict ‘excessive’ lending is approved. The FSA are proposing, amongst other measures, to restrict lending to those who cannot provide any evidence that they can afford to repay the debt, which it believes continues to pose a serious risk to long-term economic stability, pointing to the first 3 months of 2010, which saw non-verified loans make up 43% of all approved mortgages.

The Director Of Conduct Policy at the FSA Sheila Nicoll, is quoted “We have made it very clear that in introducing any new requirements and in developing appropriate transitional arrangements we will be sensitive to economic conditions and any potential impact on the mortgage market.”

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