FSA housing market solutions criticised

Posted: 19 Mar 2009 13:09:04 GMT

Solutions to solve the housing market problems proposed by the Financial Services Authority (FSA) will not work, the director of MyMortgageDirect has claimed.

Yesterday, the FSA announced that it may be necessary to impose a limit on the size of mortgages people can borrow.

However, Catherine Hearnden, the director of the website, suggested that a "one size fits all situation… doesn't work".

Ms Hearnden added: "The affordability side of things, which the FSA has been pushing for years, is the right way to assess mortgages. It can be done in a very stringent way but it can't be a one size fits all situation."

She added that many of those aiming to get a foot on the housing ladder were single, with few financial commitments "besides a mortgage" meaning that they could "get a nice low interest rate if they have a decent deposit".

"I cannot possibly see how limiting them in this way helps," she concluded.

According to figures from the Council of Mortgage Lenders last month, around 40,000 homes were repossessed, equating to around one in 290 mortgages.


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