Labour MP slams FSA again over MMR
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Labour MP George Mudie has once again been critical of the Financial Services Authority’s Mortgage Market Review and called on the chancellor to step in.
Speaking in last Wednesday’s opposition debate in the House of Commons on measures to promote growth and boost employment, the Treasury Select Committee member and Leeds East MP, said the FSA’s proposals have created a mortgage market where first-time buyers need a 20% deposit.
Speaking about how housing is the key to creating more jobs, Mudie told the Commons: “Housing triggers so many additional jobs and so much additional expenditure.
“There is one thing the chancellor could do without spending any money. I know there is a balance. An average two-bedroom house costs £160,000. To get a mortgage requires a deposit of £32,000.
“Need we look any further to understand why youngsters are not buying houses? I know we have to protect people from being irresponsible, but such a LTV ratio has knocked house purchase off the table.
“As we are not building social housing, it is a real block. Perhaps the chancellor could speak to the FSA to the banks and say, “Ease off and look at each case on its merits.”
Mudie’s comments are the third occasion on which the MP has voiced concerns about the impact of regulatory reform being introduced by the FSA. A year ago, he blamed a lack of mortgage availability on the uncertainty created for lenders by reforms the FSA may be planning to introduce.
And, in February this year, he said there was a danger the FSA could over-react to criticism of past regulatory failings by implementing unnecessarily robust reforms that could potentially damage the mortgage industry and “damage young kids getting a start with a new house because of all the regulations.”
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Readers' comments (9)
JMD | 18 Oct 2011 5:12 pm
At last an MP who is trying to help next generation buy/ help next generation of advisers (or one's still trying to make a living in this line of work) to keep our industry ALIVE. It is high time the FSA tried to assist the people paying their wages, instead of scaring the lenders into submission. Lets get 100,000 backers online to force the issue !
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Anonymous | 18 Oct 2011 7:09 pm
The problem was the FSA didn't really understand the market they were regulating and the consumer they were trying to benefit. The problem now is - they don't understand the market or the consumer. The result is the market is stifled and represents poor value for the consumer - who ultimately pays the £500m p.a. for the shambles.
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Charles Bunbury | 18 Oct 2011 7:10 pm
Until the government put a stop to the FSA Micro managing the economy, the rich will continue to get richer as more FTB are forced into rented accommodation under the guise of consumer protection. JDM add my name to your list.
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Martin Tapper | 18 Oct 2011 8:38 pm
In the words of the immortal bard "I can't believe it!"
Yet again we have complete mis-information about how much deposit is required from first time buyers.
If you are fed up with hearing the it is necessary to have a 20% or 25% deposit to buy a house, I call on all you brokers who want to see a revival in the market to write to your MPs and bring this to their attention. Blog it, Tweet it , Contact your local press. Do everything you can to educate the ignorant,
IT IS TIME TO STOP THE MISINFORMATION ABOUT DEPOSITS BY THE IGNORANT.
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Robin Banks | 18 Oct 2011 10:19 pm
Too late, attitudes towards borrowing have changed, move on, the mortgage market is as dead now as the mining industry was in 1984 and there's no going back..
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T. | 19 Oct 2011 9:27 am
Its really quite simple lending should be based on the applicant's affordability. Eg just because you can get a 20% deposit does not mean that you can afford the 80% mortgage - on the other hand the applicant may get a 10% deposit but can afford the 90% mortgage. Base lending on affordability. Simple.
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bobby | 19 Oct 2011 10:13 am
Too late me old son. The MMR proposals have already all been implemented by the lenders and there is no going back. The mortgage market is now rigged to make a mortgage a luxury so only the priviledged few will be property owners as well as wealthy fatcat landlords as the rest of the population kow tow to the corrupt Tory government and FSA who have colluded to bring this state of affairs about.
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Robin | 19 Oct 2011 11:42 am
Another confused 'dead-head' Labour MP. Let's think? Who was in charge of the Banks regulation when everything went silly re adverse/self-cert? The FSA & Gordon Brown!!!
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Anonymous | 20 Oct 2011 8:46 am
We need to end the country's obsession with home ownership as some kind of fashion accessory and build more social housing. We need to create more jobs in manufacturing and take the power from those criminals in the City.
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