Sunday, July 12, 2009
We don’t need no regulation
Tough new curbs on mortgage lending to limit loans and force homebuyers to come up with far bigger deposits are being eased amid fears that they could wreck the emerging recovery in the housing market. Earlier this year, Gordon Brown asked the Financial Services Authority to consider a ban on mortgages with a high loan-to-value (LTV) rate. FSA executives told a parliamentary committee last week that such restraint could lock first-time buyers out of the market just as they were starting to regain confidence. Their warnings reflect a growing consensus in Whitehall that banning higher-risk mortgages may be counterproductive.