Robert Sinclair, director of the AMI, says: “This report sets the scene for the major review of mortgage regulation to be consulted on in September. We will now engage in a full and frank discussion with government and the regulator in advance of its publication.
“Lord Turner is right to acknowledge the problems that could be caused by placing formal restrictions on loan to value and loan to income ratios. It has been disappointing to see needless speculation by many over the last few days that has unnerved the public.
It says it will fully engage with FSA to ensure that any restrictions do not limit innovation or further damage public confidence in the housing and mortgage markets.
He adds: “The decision to take time to get the right solutions is appropriate as banks and mortgage lenders are still caught in difficult positions with most government initiatives still to be either implemented, or their impacts fully felt.
“This time will be used to ensure that the solutions are the most appropriate to address the real issues. We will work with our members and fellow trade bodies to ensure this happens.
“We will also engage with FSA on the consideration of regulating second charge and buy-to-let lending. We hope these topics will be discussed at the FSA Mortgage Conference on 12 May.
“We must make sure we do not exacerbate the recent problems with unnecessary action, and we must ensure that any reform of the mortgage market provides the best outcome for consumers.”