Nationwide says the FSA wants a smaller mortgage market in order to give it greater control.
At a Money Marketing mortgage round table, Nationwide head of mortgage strategy and policy Andrew Baddeley-Chappell (pictured) said some of the FSA’s proposals indicate it wants to reduce the size of the mortgage market.
He said: “The FSA – and possibly the Bank of England – wants a market that is smaller, less high risk, less open to people, they want that control.”
Council of Mortgage Lenders head of policy Jackie Bennett said the FSA was trying to create a market with zero arrears or repossessions. She said: “You cannot regulate a market so there are never any arrears or repossessions and I think that is what the FSA would like but you can never get there.”
Emba group sales and marketing director Mike Fitzgerald added: “You are always going to get repossessions and the larger the market the larger the number.”
Baddeley-Chappell also warned policy decisions might be rushed through just before the new regulator, the Consumer Protection and Markets Authority, takes over from the FSA.
He said: “There is an artificial date now, which is December 31, 2011. That is going to drive artificial decisions and timings for the mortgage market review.”