Housing minister warns on mortgage regulation
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Housing minister Grant Shapps has warned that new rules on irresponsible mortgage lending must not be drawn too tight as they could deepen the housing downturn.
Shapps is meeting with FSA head Hector Sants next week to urge that the regulator’s review of lending practices is not so strong that it could make life even more difficult for homebuyers and potentially shut thousands out of the market.
The FSA launched a consultation into responsible lending last year with the aim of preventing a repeat of the poor lending practices seen in the housing bubble.
Speaking to the FT, Shapps said that while he does not want to see banks going back to those days of irresponsible lending, he said that it would be a mistake to “bolt the door” when the housing correction had already taken place and that the FSA should not be “micromanaging” what he believes should be a competitive market.
Shapps is going to tell Sants that the Government wants the market to be regulated but not on a “product by product” basis.
He said: “I don’t want to snuff out innovation in the mortgage market.”
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Readers' comments (10)
Michael Fallas | 31 Dec 2010 2:01 pm
Isn't it odd that an elected Government minister has to in effect ask the FSA to do something!
Who is in charge of our economy the FSA or the Government?
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Anonymous | 31 Dec 2010 2:27 pm
the FSA are in charge,leave it to them and every body will be renting at sky high rentals,how affordable is that?the young people of today have no chance of getting on the housing ladder.
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Andy | 31 Dec 2010 2:43 pm
Michael Fallas, bang on.
Even odder is an elected Minister who seems to know what he is talking about.......Well done Mr Shapps.
It might be worthwhile for those that think Mr Shapps is on the right track to drop him an email to let him know...........something I have never done before but a little extra support from us wont do any harm.
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Swanny | 31 Dec 2010 2:45 pm
Amazing - "to Urge...."
erm, why don't you just tell them.
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M J Winfield | 31 Dec 2010 3:31 pm
Grant Shapps, is putting on record that the FSA have gone over the top again.
It will make no difference the FSA is not prone to listen, its function is self protection. Why else would it practice so much heavy gold plating.
The thicker the plating the harder it is to rub off.
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Peter Herd | 31 Dec 2010 4:18 pm
who every is in charge the new rules should not be watered down so far to creat a new housing boom and banking bust. This is hard I know but we need these new rules to stop the house price madest of the last 30 years !!
Not every one needs or should buy their own house - what is wrong with renting after all.
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The Ghost of Independence Past | 31 Dec 2010 4:28 pm
And very wise too! The FSA are quite capable of killing the patient with the medicine eg they are hell bent on doing this with their idiotic RDR. £1.7b cost to decimate the most successful and complaint free independent sector. Happy new year Hector SantoClause even if you’re not planning a prosperous one!
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terry | 1 Jan 2011 1:21 pm
The FSA is just an out of control quango, has been allowed to get away with murder with no concept of how the majority of this population exist. There are still millions of people for insxtance that are underinsured(in fact some have none at all) due to the demise of the home service insurers due to the costs inflicted on them by the FSA. This has no doubt also reflected on the savings gap.
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Brian Pettinger | 2 Jan 2011 8:27 pm
Innovation in financial markets got us into trouble in the first place.
Perhaps we should innovate a new minister
http://www.housingmarket.org.uk/
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Anonymous | 2 Jan 2011 8:32 pm
Quite correct Michael.
Don't urge, warn or ask - just tell them. If they don't like it they can become part of the 330,000 civil servants about to lose their jobs.
Easy really.
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