Regulation has played no part whatsoever in contributing to a sustainable housing market, HBOS said this afternoon.
Joel Ripley, head of mortgage strategy at the UKs largest mortgage lender told delegates in Jerez that regulation had led to too many undesirable unintended consequences.
Attacking Tony Blairs Labour government Ripley went on to say that the UK housing market needs policy that is not reactionary, narrowly conceived and that didnt generate lots of follow-up policy with excessive micro management. And he stressed that what it must do is to continue to provide a safety net for the UK economy.
Worryingly, HBOS has forecasted that there will only be 0.920 million property transactions this year the first time that the figure has fallen below the million mark in a long time.
But Ripley says: We still believe that the possibility of a hard landing is remote. Yes its true that there are mixed signs but it looks likely that consumer confidence will recover rapidly.
In the early 90s lenders got Britain through by actively adapting to sustain the market through neutral and negative equity products.
Since that time lenders have been innovative in assessing new sources of capital to fund the market. And the rise and rise of mortgage intermediaries has been key to improving access and choice for borrowers. Intermediary distribution has fascilitated new entrants and successful third party administrators such as Home Loan Management.
Ripley also gave delegates the heads-up warning that more and more lenders would have to introduce ERCs due to reporting requirements under Base II and IFRS.
He adds: In the event of a downturn we must remember that lenders do not have the same versatility in their balance sheet that they used to enjoy and they do not use risk sharing any more.
There was good news for intermediaries too though. Ripley says that HBOS is actively looking at a retention policy that will reward intermediaries for reintroducing business. For example, should an introduced client be coming to the end of their two-year fixed rate with Halifax, rather than churn the client away intermediaries will be encouraged to place the client within the group again, say maybe with Intelligent Finance, and still receive another proc fee.