Home mortgage regulations 'unnecessary'
A new report by the Financial Services Authority (FSA) which calls for greater regulation to protect the mortgage market from negative influences from abroad has been criticised by one body.
According to the FSA, subprime home mortgage lending needs to be curbed through additional legislation which prevents banks from giving money to those who cannot afford to pay it back.
But AMI research shows that such mortgages accounted for 12 per cent of the market at their peak, compared to 32 per cent in the US where the financial crisis hit banks the hardest.
The organisation, through a report entitled The UK Mortgage Market - a Comparative Study Reflecting US and European Influences, insists that there is no need for such strict regulation in this country.
Robert Sinclair, Director of AMI, said: "If the FSA and the Government wish to exert greater control over house prices, product regulation is not the answer.
"The growth in house prices is impacted by a wide range of macro-economic policies or more specific government policies, such as reducing the availability of social housing or removing the restrictions on the supply of new housing units, whether new build or the adaptation of existing buildings or land use," he added.
Despite recent concerns over lenders' willingness to help those falling into home mortgage arrears, figures recently showed that home loan debt and repossession was down in the second quarter.
Council of Mortgage Lenders research revealed that 11,400 people's homes were repossessed in the second three-month period of 2009, which is down ten per cent on the numbers for the first quarter, which saw 12,700 such cases.
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