Report on mortgages published by ippr

Posted: 13 May 2009 09:30:00 GMT

Mortgages are the focus of a new report from the Institute for Public Policy Research (ippr).

The paper calls from some strict measures to stop a financial crisis of the scale the UK has just witnessed from happening again.

Self-certified mortgages which do not require documentary support should be ended, while buy-to-let mortgages should be restricted to a maximum of 75 per cent of property value, the ippr states.

Dubbed The Madness of Mortgage Lenders: Housing Finance and the Financial Crisis, the publication says a limit on house price-income ratios of possibly 3.5 times joint incomes is required.

However, the ippr admits that this may make buying a property more difficult for first-time buyers.

Professor Chris Hamnett from Kings College, London, who wrote the paper, said the current housing market downturn was partly triggered by mortgage lenders who had "expanded far too rapidly".

Various products had "generous loan-to-value and loan-to-income ratios funded by short-term borrowing on the wholesale money markets", he added.

This comes after the editor of Property Hawk website, Chris Horne, claimed landlords looking for buy-to-let mortgages are finding finance hard to come by.


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