AMI’s latest report, ‘The UK Mortgage Market – a comparative study reflecting US and European influences’, argues that developments in the UK are the result of a wide range of other factors including macro-economic policy that produced similar trends in other countries with vastly different regulatory regimes.
 
The report was drafted by Dr Oonagh McDonald CBE, former MP, Treasury spokesperson and FSA director. AMI’s paper is intended to inform the FSA consultation into mortgage market regulation starting in October, first announced by FSA chairman, Lord Turner, in May.
 
Robert Sinclair, director of AMI, said it looked forward to the full consultation paper in October, but urged caution before the FSA introduced “unnecessary regulation” that was unlikely to have the desired effect on the UK market. 
 
He explained: “If the FSA and the Government wish to exert greater control over house prices, product regulation is not the answer. The growth in house prices is impacted by a wide range of macro-economic policies or more specific Government policies, such as reducing the availability of social housing or removing the restrictions on the supply of new housing units, whether new build or the adaptation of existing buildings or land use.”
 
The trade body called for further empirical research by FSA in arrears and possessions; to determine how many were caused by unemployment, illness, divorce, other family emergencies and how many by over-borrowing on the part of the mortgagees. AMI also called for further study into mortgage equity withdrawal;  to evaluate how much was withdrawn by the over-fifties to supplement income; by other age groups and for what purpose; and finally, what proportion of those taking equity out of their homes have been able to manage the increased loans without difficulty