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CML says FSA is excessive rather than the lenders

The Council of Mortgage Lenders is contesting FSA claims that lenders are


repeating the mistakes of the late 1980s through excessive lending.


In its latest survey of market trends, the CML says first-time buyers are


borrowing 2.28 times their income while existing homeowners are taking out


loans of 2.14 times their earnings.


These are nearly a third lower than the FSA figures released in recent


weeks. The FSA survey of the nine top lenders found that the upper ranges


are at 3.5 to 3.75 times income. But the CML is stressing its research


covers the whole lending market and so gives a more accurate picture.


It also says the average loan-to-value ratios have stayed virtually the


same for the last 18 months. First time buyers are receiving loans that are


worth 78 per cent of the value of the property, the same rate as January.


Other numbers showed total gross lending to be £7.8bn in February. This is


up from £7.3bn in January and last February&#39s total of £6.1 billion. While


down from peaks last summer of £11.8bn, the CML says that such a decrease


is normal as consumers tend to buy less in the early months of the year.


The average interest rate for new mortgages was 6.38 per cent, up from


5.88 per cent in January.


CML director general Michael Coogan says “These figures are well below the


upper ranges of 3.5-3.75 times income cited by the FSA.”


The FSA says it is in the early stages of its work and says it will have a


better idea of the situation later this year.



Borrowers seeking higher LTVs, p12

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