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CML says regulation adding up to 1,000 to buying costs

Regulation can add up to 1,000 to the cost of buying a house and is undermining Government plans to extend home ownership, says the Council of Mortgage Lenders.

According to the CML’s pre-Budget submission, M-Day is just one of several regulatory initiatives adding to the burden on lenders and their customers, leading to the cost of buying a home increasing to between 500 and 1,000.

M-Day and the FSA’s plans to impose significant fur- ther demands on firms, with lenders facing visits from supervisors and a forthcom-ing review of the mortgage rulebook, are all adding to the cost of doing business in the sector.

Add to this the Basel II capital requirements for lenders and the proposal to introduce home information packs in 2007 and the overall increase in regulation is likely to have a significant impact on lenders and the end cost to customers, says the CML.

What the CML describes as a “rising tide of regulation” is in direct conflict with the Government’s plans to increase home ownership as laid out before the general election, says the CML.

It supports increased pri-vate ownership of homes and says it is working with the Government on ways in which private finance can stretch the limited public resources available to help first-time buyers.

Deputy director general Peter Williams says: “The FSA’s mortgage rulebook is simply one strand in the mesh of regulation affecting the lend- ing industry. The scale of intervention is at odds with the Government’s commitment to deregulation or even better regulation. The issue of regulatory costs needs to be addressed urgently before it completely undermines the drive to expand home ownership.”


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