AMI director Richard Farr says recent results in the banking sector demonstrate the relative strength of the UK mortgage market in comparison to the US.
He says: “Lenders and brokers in the UK have been much more responsible in their dealings with consumers and the underlying credit quality of the assets remains positive.
“There may be a reduction in the size of the wholesale lending market, which risks leading to an upward trend in the cost of borrowing. But this should not be passed on in full to the consumer. The banking profits show the resilience of the market and banks should seek to absorb a share of these extra costs and ensure they are treating customers fairly.”
Farr says these extra costs and the withdrawal of certain mortgage products requiring lower deposits will make it difficult for first time buyers in particular.
He adds that alternative sources of funding are needed for the UK mortgage market.
He says: “That is why we have been in discussion with the Treasury, the Bank of England, the main political parties and the industry to help bring new lenders into the market from outside the UK.”