New mortgage rules are 'common sense' says BSA
25th Oct 2012
The Financial Services Authority (FSA) announced new rules earlier this week for the lending of mortgages to buyers of properties for sale which will come into effect from 2014, making sure that brokers are more careful.
It is hoped that this will see the UK property market more effective in combating financial issues that are believed to be, in part, born of the fact that mortgages were previously awarded on the belief that house prices would never stop rising.
One organisation has hailed these new moves from the FSA as a victory for common sense, rubbishing the notion that it prevents certain groups from getting a foot onto the property ladder.
The Building Societies Authority (BSA) said that it means that buyers will be faced with greater scrutiny and far more detailed questioning, which will have the end result that the mortgage application process will take longer, but also be more efficient.
Paul Broadhead, head of mortgage policy at the Building Societies Association, said: "No one can argue with the objective that lenders lend what consumers can afford to repay. It is common sense that a mortgage should be repayable from income, rather than rely on increasing property prices and this is the approach that building societies and other mutual lenders already take."
Posted by Staff Writer: Robin Stenson
© Zoopla Property Group Plc