The FSA Discussion Paper “Mortgage Market Review” has already attracted quite a lot of press comment…..”No more Liars Loans” (self-cert mortgages to you and me), regulation of “buy to let” mortgages, interest only loans under the microscope etc etc. This is all the stuff of headline writers. However, there is something more fundamental at the root of changed FSA thinking – “We believe that irresponsible borrowing has been just as much a part of the problem in the mortgage market as irresponsible behaviour by firms”. You see, for years the FSA believed in the notion that the free market model is perfect. “Our policy approach to date has been underpinned by a view that mortgage consumers will act rationally to protect their own interests”. So regulation wasn’t necessary! No, seriously, that is what they thought! But now “We believe that we need to change that approach, recognise the behavioural biases of consumers and be more interventionist to help protect consumers from themselves”. So there you have it. The Punch Bowl may have been given back to the City Bankers but Jo Public will no longer be able to gamble on the housing market. It seems that there is a determination to prevent another unsustainable rise in house prices. Truly “No more boom and bust”. So sitting tight and hoping for a return to the dizzy heights reached by prices in 2006-2007 does not look like a viable option. Does it?