In its News & Views newsletter, the CML reported that the combined impact of the proposals would have affected around 260,000 borrowers, or 45% of the market, or 51% of the mortgages borrowed between 2005 and 2009.
The CML said that the lending figures are less this year because the FSA made it clear that additional proposals aired in the MMR – over and above its income-expenditure affordability assessment, are not fully formed in its thinking.
The CML researched the impact of some of the key proposals in the MMR
It said that the FSA’s requirement to assess affordability on the basis of a maximum term of 25 years would have had a modest impact in 2010, raising the number of borrowers affected or even declined this year to an estimate of 13%.
It added that if all loans this year had been assessed on the basis of capital-plus-interest payments, a total of 20% could have been affected, a figure that rises to 37% of borrowers who took out an interest-only loan in this period.
The CML said affordability been assessed on the basis of a 2% interest rate stress test, a total of 32% of borrowers this year could have been affected.
While the FSA’s ‘green proposals’ are an area of concern for the CML, it said, said no matter how these measures are implemented, modified or dropped, each change will have a major impact on the mortgage market.
The consultation on the proosals ends on 16 November.
