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Lenders hit back at Cameron criticism

Lenders have slammed Prime Minister David Cameron’s claims that they are holding back the housing market by lending too cautiously.

Last week, Cameron called on lenders to return to “respectable” lending to get the housing market moving. Building Societies Association head of mortgage policy Paul Broadhead says the Government cannot criticise lenders for being more prudent after it has openly condemned them for lending irresponsibly in the past.

He says: “Banks and building societies are lending to people they think are a good risk and I do not think anyone can criticise any financial institution for prioritising lending to responsible borrowers.

“The Government and the regulators are encouraging the industry to go back to prudent lending. You cannot then say that because some people cannot get mortgages that it has gone too far the other way.”

The Council of Mortgage Lenders says lenders are restricted by regulation and a lack of funding and calls on the Government to tackle the restrictions.

A spokeswoman says: “It is all to do with the FSA, the mortgage market review and the restraints put on lenders. Obviously, there is a lack of funding and capital requirements are a huge thing at the moment.

“Unfortunately, while the politicians are saying lenders need to do more lending, they need to start talking to the FSA to find ways in which that can be achieved.”

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Comments

There are 4 comments at the moment, we would love to hear your opinion too.

  1. The politicians blame the lenders because they have, with the exception of Mark Garnier, no idea of how powerful the monster, which is the fsa, really is.
    It is not in the regulators interest to inform the public that they are the bad guys , it suits them to let the industry take the blame for everything.

  2. It’s going to get worse not better. By the time the lenders start repaying the £320 billion from the Special Liquidity Scheme and the potential borrowers try to cope with the rise in other costs I can only see the situation deteriorating

  3. The last paragraph says it all really, except, they need to make the FSA listen as well. Sensible and realistic action is what has, and is required – not as has happened and continues to happen, ridiculous overreaction in may areas that have had nothing to do with the woes of the last few years!

  4. I think he was right to say what he did – he is simply asking that they return to a normal way of lending not the irresponsible lending of the few years leading up to 2007. I know a lot of people personally that were £25,000 or so in debt just through credit cards alone and living a life which wasn’t reality, buying cars they couldn’t afford, going on luxury holidays but not prepared to work hard or get a better career to pay for it – they then got their debts written off and haven’t had to pay a penny of it back. The country relies very much on responsible people like myself who didn’t do things like this – what if we all did it. These types of people should have been more strictly controlled by lenders. My own mother for example is in part time employment, in her 60’s, working in shop work on a low wage – I am younger, working full-time in a good job with a much higher wage yet she gets cheaper APR on credit cards than me, a larger overdraft from the bank and constantly getting good rate mortgage offers. They are lending too cautiously to good hard working people like myself who do have good credit history but no do not have a house and do not have a deposit to buy a house but otherwise I’m a perfect candidate, they are relying too much on a rigid computer system asking a few questions and coming up with a no to which you can’t argue out. I can’t save up a 25% deposit for a decent house. I can’t even save up 10% to live in the roughest part of the city (and I’d love to live next to the people on benefits I’m paying for that would be a real treat) (ever notice how their windows are always open in the winter – that’s because when someone else is paying for your heating you don’t worry about having to turn it off to save money do you). I pay rent and gas/elec, petrol everything has all gone up so my wages are swallowed up at what point am I ever going to be able to save up 25%. He’s right to slam lenders they were irresponsible and arrogant – arrogant people don’t like to be told off or told what to do.

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