Wednesday, 28 October 2009


The FSAs recent discussion paper on the future shape of the UK mortgage market is a sobering read.Restrictions on self cert lending and fast-track loans alongside an increased focus on "toxic" combinations of risk and on granular checks on affordability are a predictable regulatory reaction to the perceived shortcomings of lenders and intermediaries. Lets not be coy; a review is necessary. There have been significant failures in the mortgage market, an absence of risk-pricing and over-supply of easy credit.A review is needed to understand what happened and to make sure the big mistakes are not repeated in future. BUT the UK mortgage market was not uniformly flawed nor was it full of failed business models. The market has been innovative, competitive and effective in helping many people buy their own home. The review is timely but it needs to take a proportionate and measured view of the mortgage market, so that a healthy baby is not hastily despatched with the bathwater. My hope would be that we all learn lessons from the events of the past 2 years but that we also acknowledge the value in the choice, competition and diversity in the UK mortgage market so that a refreshed market emerges rather than the unintended consequence of restricted customer access to suitably tailored products.

1 comment:

  1. It's so true that the national debate and pressure for change is dominated by a focus on the big banks that got it wrong, ignoring the fact that smaller, locally-based organisations such as your's have been getting it right for generations - and still do so. Yes, change is needed to prevent a repeat of Northern Rock and Co, but not at the expense of sacrificing true choice in the market - and that means local choice too.