"Gain will not match the pain" in regulatory changes on mortgages

14 July 2010

Written by Simon Whittaker

Following proposals by the Financial Services Authority (FSA) that a change in regulations should be made in order to help ensure the responsible lending of mortgages, one organisation has said the damage that the legislation could do to the industry outweighs its potential for good.

Having found that 46 per cent of households were left with either a shortfall or no cash after making repayments on their home loan and following the deduction of living costs, the FSA called for the verification of borrower incomes in all cases.

The Council of Mortgage Lenders (CML) has responded, saying that the legislation would result in higher administration costs for providers and make it more difficult to obtain home loans.

Director-general of the body Michael Coogan commented: "The risk is that the gain will not match the pain in the short term," adding that the consumer will feel the disadvantages of the regulations now but not see the benefits of them until "some unspecified time in the future".

Why not take a look at our best Buy to Let mortgages and make an enquiry online now.