MMR - more than a pin prick?
2011 beckons but what will the New Year bring for the housing Market? In our view the key to any future stabilisation will be the Financial Services Authority concluding its Mortgage Market Review. The FSA believes that the house buying public needs protecting from its own folly. In the boom years people got over exuberant and took on ever increasing amounts of mortgage debt (often on an interest only basis) to gamble on rocketing house prices. The FSA feels that if people will not see sense then access to mortgages needs to be controlled by greater regulation. The remaining few mortgage lenders left in the market are up in arms and talk of mortgage rationing denying a generation the opportunity to get on the housing ladder. However, in reality the continuing lack of capacity is due largely to the demise of Securitisation (that’s where those who originate loans slice and dice them into bonds which they then sell to Investors). The paradox is that unless Investors can be confident about the underlying quality of mortgage underwriting then there is no prospect of attracting much-needed funds from outside of the traditional banking sector. The FSA needs to hold its nerve and introduce measures that will rebuild trust in the quality of mortgages, only then will we see wholesale markets re-open and money flow back into the property market at a sustainable level
Compliance Officer for Legal Practice
Andrew oversees the Firm’s Quality Systems and is committed to making sure that our client’s receive the very best customer care and attention along with the best marketing and legal advice in the area.
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