Housing minister Grant Shapps has hit out at the FSA’s Mortgage Market Review, branding it a “step too far”.
Speaking at the National House-building Council’s annual lunch yesterday, Shapps said the problem with the mortgage market was a lack of regulation of the way banks had operated.
He said: “I’m absolutely clear about this. I think it was at the moment that I realised I wouldn’t have a mortgage if the MMR changes went through that I thought this might be going a step too far. There is no point in closing the door after the horse has bolted.
“The problem with the mortgage market wasn’t some pernickity issue to do with the FSA or anybody else, talking about whether you can lend X or Y percentage or what form you had to get the end user to sign, it was because there was a lack of central regulation on the way the banks were operating.
“What we need is top level central regulation and not pernickity down on the dirt regulation and what you can and can’t do as a mortgage company.
“I hope the FSA will be getting that message. They are independent and are of course free to go off and do this work but I think it is important we learn from the lessons of the past without repeating them which is what I think they are in danger of doing.”
The FSA would not comment on Shapps’ views regarding the MMR. An FSA spokeswoman says: “We have outlined why we are conducting a review of the mortgage market and have already said that we are not rushing into anything and will be carrying out a full economic analysis on the impact of any proposed changes before we issue any final rules.”