Lenders expecting more regulation despite market growth cooling

by Aaron Strutt

Oct 14 2014

More than half (55%) of intermediary mortgage lenders and a sizable minority of brokers (40%) expect further interventions by the Bank of England’s Financial Policy Committee (FPC) despite market growth cooling, according to research by the Intermediary Mortgage Lenders Association (IMLA).

The findings come as the first of the FPC recommendations – the interest rate stress test against a 3% base rate increase for borrowers, and a 15% cap for lenders on the volume of new loans above 4.5x loan to income (LTI) – take effect across the mortgage market this month.

Peter Williams, executive director for IMLA, commented: “These findings show the industry is well aware that its recovery will be closely monitored in the interests of maintaining economic and financial stability. The announcement that the FPC is considering loan to value (LTV) limits shows it remains vigilant, but recent changes – including MMR – have already had a calming effect on activity and the full effects are still to emerge.”