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Regulators unmoved at blocking buyers

Regulators are undeterred by the fact that tougher supervision of the mortgage market is likely to lead to lower levels of homeownership.

PMS chairman John Malone said the Bank of England and the FSA have made it clear they will not allow the industry to go back to excessive lending even if that means stopping borrowers from getting mortgages. He said: “The FSA have seen we were just far, far too liberal in the way we gave out mortgages and advice and I think, on the back of the meetings we have had with the Bank of England, they want more control over the economy of this country. And they don’t mind if fewer people own a property.”

But Association of Mortgage Intermediaries director Robert Sinclair said there needs to be public debate on what a move towards a rental rather purchase market will mean. He says: “To re-engineer a world which is much more about moving people from sustainable homeownership to a situation where they have to rent with a legal structure that is still six months’ short tenancy, and when you are sitting in a house knowing your landlord can give you one month’s notice and evict you, how comfortable are you about job, family, stability? Is this something this country wants to happen?”

Mortgageforce managing director Kevin Duffy said the mortgage market review was becoming “a social engineering project” where the FSA was taking on the mantle of the Government. He said the MMR had a “patronising” tone in its attempt to “help the consumer help himself”. He said:

This is short-sighted and is almost playing judge and jury on this matter of affordability. Who decides what is affordable? To straitjacket some of these things as they are trying to do is wrong.”

Chartered Insurance Institute’s Society of Mortgage Professionals chief executive Richard Fox said: “The other thing they have not thought about is if this comes into effect and the pool of people who can access mortgages is much smaller, what is that going to do to the price of housing? What is it going to do to the housing market? They see it as somebody else’s problem. Well, I don’t think it is, it is a UK plc problem.”

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  1. FSA should be renamed FSEA financial social engineering authority. Let them get on with it. The more the public realise what power this unelected QUANGO have awarded themselves, the more chance we have of changing things.I bet you could question every employee at fsa & you would not find one of them renting their home. They reserve their social engineering for the minions below them.

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