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‘FTBs won’t be hit by MMR’

FSA chairman Adair Turner says the mortgage market review will affect first-time buyers the least.

In its final MMR consultation paper, published in December, the FSA said the final proposals would affect 2.5 per cent of borrowers in subdued times and 11.3 per cent of borrowers in boom times.

Giving evidence to MPs at the Treasury select committee evidence session, Turner said FTBs would not be affected by the proposals as much as other groups.

He said: “The figures actually suggest the impact is least, certainly in subdued times, on first-time buyers. That, when you think about it, is not surprising. First-time buyers, because they are constrained by their inability to get a deposit, tend sometimes to have lower loan-to-income ratios than some of the home movers, because these people have got the equity to deal with the deposit. So that is why we end up with a smaller effect on first-time buyers. Also, interest-only proposals have a very small effect on first-time buyers because few first-time buyers are given interest-only mortgages.”

Coreco director Andrew Montlake says: “The MMR will affect everyone, I do not think you can draw massive distinctions between different types of borrowers.”


Coventry reduces interest-only LTV to 50%

Coventry Building Society has cut its maximum LTV for interest-only lending from 75 per cent to 50 per cent. The change is effective across both its direct and intermediary brands. A spokeswoman for Coventry says: “Following moves by a number of other lenders to restrict their criteria for interest-only lending the Coventry has also reduced […]


Rockingham advice claims will not be covered by PI cover

Rockingham Retirement has revealed its advice arm has had no professional indemnity insurance in place since August 2010 and that its former insurer will not accept any claims against the firm. PI cover is valid for when claims arise, not when the business is written, and so any claims against the firm since this date […]


FSA’s conduct of business unit costs increase by 25 per cent

The budget for the FSA’s conduct of business unit is set to rise by 25 per cent from £147.6m in 2011/12 to £183.3m in 2012/13 as the regulator prepares for the introduction of the twin peaks regulatory model. From early next year, the FSA’s conduct of business unit will become the Financial Conduct Authority and […]

Virgin Money to no longer offer fast track

Virgin Money is to no longer offer a fast track facility for mortgage applications. This means that all mortgage applications will now require income verification.   All pipeline applications already agreed on a fast track basis will be honoured, unless there is a material change to the case which takes it outside of fast track […]

Don’t play chicken with the Bank of Japan

By Josh Ausden, Head of Client Investment Strategy, Neptune Short-term yen strength has hurt the Neptune Japan Opportunities Fund but recent events have only added weight to our conviction that the Bank of Japan will act to ease policy, boosting multinationals’ profits and weakening the yen. In recent weeks the performance of the Japanese stockmarket […]


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