Media overreaction to mortgage clampdown
Newcastle's leading estate agency has spoken out against the media reaction to FSA proposals that will effectively ban self-certification mortgages and require lenders to assess whether a borrower has enough disposable income to meet the repayments.
The FSA wants all mortgage applicants to provide proof of their income and make it ultimately the lender's responsibility to ensure borrowers can afford the loan.
But Heywoods has voiced its concern about news coverage of the FSA announcement, which could undermine renewed confidence in the housing market.
The company said that the media had played on the heartstrings of their readers, who were naturally concerned that shifting more of the responsibility onto lenders could make mortgages more expensive and difficult to obtain.
It was in the self-interest of the media to blow stories out of proportion, a company spokesman added, and in the case of the latest FSA proposals, this was no exception.
The company nevertheless welcomed the proposed measures, as anything that helped to prevent a boom and bust housing market had to be a good thing.
But regulation in the mortgage business is hardly new and it had always been against the law to lend to someone who hadn't the means to pay.
Heywoods said that affordability had long been its byword in helping people to buy property and, in order to help buyers avoid overstretching themselves, it had been implementing a budget planner in recent years.