FSA mortgage proposals 'inappropriate'

Posted: 22 Mar 2010 10:48:57 GMT

New proposals from the Financial Services Authority (FSA), which could set maximum limits on loan-to-value ratios for mortgages, have been dismissed by one expert as "inappropriate".

Bernard Clarke, communications manager for the Council of Mortgage Lenders, says: "We don't favour credit control as it risks excluding some consumers, who would be denied as a result access to a mortgage even though they could sustain the commitment."

The plans outlined by Lord Adair Turner, chairman of the FSA, at CASS Business School in London, suggest thresholds should be set for maximum loan-to-value rates to curb asset price bubbles and prevent a future boom-and-bust in the property market.

Mr Clarke states there are already big barriers for first-time buyers hoping to step onto the housing ladder and implementing measures such as those proposed by the FSA could create further "significant hurdles".

According to Moneyfacts, there are currently 90 per cent more low-deposit mortgages available than there were in March 2009.

© Houseladder Ltd