Thursday 23rd September 2010 – FOR IMMEDIATE RELEASE
Even tougher restrictions on mortgage credit would be a disaster for the housing market which is already suffering its worst slump in decades, warns the Federation of Master Builders (FMB).
Responding to the suggestion from the Financial Services Authority Chairman, Lord Turner, for tougher restrictions on mortgage credit as a long term policy Richard Diment, Director General of the FMB said:
"Responsible lending must be at the heart of the renewal of the UK's financial system, but restricting further the availability of mortgage finance will keep responsible borrowers out of the market. More good borrowers are needed urgently to get the housing market moving. Further restrictions will add fuel to the fire. Such a measure would only worsen to the severe housing shortage in this country which includes nearly five million people on social housing waiting lists. Almost 240,000 new homes are needed every year from 2008 to 2031. As a result of the financial crisis the UK built just 123,000 new homes in 2009/10 and numbers are not set to rise to anything close to the necessary levels in the near future. "
Diment concluded:
"The banking crisis has led to changes in the price and availability of mortgage finance to first time buyers. In a recent survey of FMB members, 67 percent of house building respondents felt that lack of mortgage finance was preventing potential clients from buying homes from them, and 79 percent indicated that lack of mortgage finance was causing the business to slow the rate of building. The FSA must ensure the system entitles lenders to some local discretion so mortgages are more, not less, accessible at reasonable rates for responsible borrowers."
