The CML asserted it is exactly how it is going to happen, not whether it should happen at all, that the industry is waiting to resolve.
“It is the detail of that reform that needs care, if undesirable and unintended impacts are to be avoided,” it said.
Shelter’s research showed 87% of first-time buyers, even if barred from the housing market, still believe lenders should lend responsibly to people who can afford the repayments.
Campbell Robb, chief executive of Shelter, said: “So far, the voice of the consumer has been completely drowned out by the mortgage industry, when in reality it is this very group who most recognise the need for stability in the market. We must not let banks go back to the old ways of irresponsible and reckless lending.”
The CML said it also agreed with the three principles of affordability tests, income verification, and interest rate stress testing, adding it funded independent Policis research to get to examine the consumer view.
The research involved both quantitative surveys and qualitative focus groups, and revealed the essentially contradictory nature of consumer’s views.
According to the Policis research, while many support tighter regulation on one hand, on the other, consumers were reluctant to see good borrowers unnecessarily excluded from achieving home-ownership.
CML director general Michael Coogan said: “Far from bowing to the banking lobby, as Shelter puts it, a measured approach from regulators and government is simply good sense in a market where there are as many risks from too much regulation as from too little.”
