Industry experts have criticised Shelter and the Citizens Advice Bureaux for backing the Financial Services Authority’s Mortgage Market Review.
In a letter to housing minister Grant Shapps last week, the charities revealed they are supporting the FSA’s proposals to introduce affordability and income checks.
They say it is vital that the government does not allow a return to the soft-touch regulation of the past that devastated the housing market and put thousands of home owners on the brink of homelessness.
But Ray Boulger, senior technical director at John Charcol, accused the charities of living in a time warp. He says: “These two charities seemed to have fallen into the same trap as the FSA in not recognising how much the market has changed over the past two to three years.”
He adds that the problem is not as bad as the charities make out and says only 2.15% of mortgages are currently three months or more in arrears.
And David Copland, managing director of Pink Home Loans, is concerned that the charities have not really understood the implications of the proposals.
He says: “I’m worried that the regulator is changing the social policy of the country into a rental culture rather than home ownership. That should be a question for politicians.”
Gillian Guy, chief executive at CAB, says: “These proposals are about the FSA ensuring that mortgage lenders and borrowers take proper care to consider whether a mortgage is affordable and sustainable over time before entering in it.”
Kay Boycott, director of campaigns, policy and communications at Shelter, says its research shows that millions of people are struggling with mortgage payments.
“We urge the government to support the FSA’s proposals to ensure we prevent even more people from living on a knife edge.”