The Council of Mortgage Lenders (CML) said this is just one of a number of unintended consequences of the FSA’s well-meaning but misguided proposals that the CML said it believes the UK’s existing 11 million mortgage borrowers have every right to be concerned about.
At last night’s Mansion House dinner, the FSA’s chairman Lord Turner said that: “we need to strike a balance, recognising that any regulation which protects some customers from taking on mortgages they cannot afford will inevitably affect others seeking to make sensible, affordable choices. We cannot leave retail financial markets entirely to themselves and continue to accept the waves of mis-selling which have been such a feature of UK financial services for the last 20 years – personal pensions, endowment mortgages, split capital trusts. But nor should we swing to the other extreme and attempt to ensure that nobody ever exercises free choice to make decisions they subsequently regret.”
The CML agreed, and Coogan’s speech summarised some of the areas the trade body believes the regulatory pendulum is swinging too far.
Coogan told the conference today: “We do not want to sleepwalk into a housing finance market which is sustainable, but meets almost nobody’s aspirations because it is so risk averse”.
As the autumn progresses, the CML will be outlining the findings from a range of both internal analysis and externally commissioned independent research currently under way, designed to contribute to the “public debate” that Lord Turner has previously encouraged about what sort of mortgage market the UK wants to end up with.