Mortgage plan will force house prices down, CML warns

[dipsydoodle]

House prices will fall if the City regulator gets its way and restricts mortgage lending, the Council of Mortgage Lenders (CML) has warned.

The Financial Services Authority (FSA) is currently consulting on ways to stop "excessive" mortgage lending.

Its aim is to stop lenders offering mortgages to people who cannot prove they can repay their loans.

But the CML says the FSA has admitted its plan will lead to house prices falling.

http://www.bbc.co.uk/news/business-11390764

So let me get this straight. The lenders want to carry on lending to those who can't afford it to help maintain house prices. In other words they want non status mortgages to persist so's they can be bailed out again a second time around and thereafter.

It's worth while remembering that prior to the crash 75% of lending by UK banks was mortgage related based - hence their importance to the economy. :sarcasm:

[non sociopath skin]

1. Fool me once, shame on you ...

The Skin

[muriel_volestrangler]

2. Nationwide First Time Buyers House Price to Earnings Index

http://www.nationwide.co.uk/hpi/downloads/FTB_HPER.xls

Now, for the UK, 4.6. Higher than at any time before 2004 (it goes back to 1983; I'm confident it was never higher before then). A drop back to, say, 3.0 (1986, 1990, 2001) might be no bad thing. It only went down to 4.1 at the start of 2009.

From the BBC article: "In July it pointed out that so-called non-verified loans still made up 43% of all home loans granted in the first three months of 2010". WTF? Has no-one learnt anything from the past few years?