Give us a break from regulatory upheaval, urges CML

The Council of Mortgage Lenders has called on the Financial Services Authority not to implement any more regulatory change in 2010.

In its News And Views news-letter last week it said that apart from its consultation on arrears and repossessions the FSA should make no further changes to the regulation of mortgages this year.

It says there would be no short-term risk if the regulator was to take some time to analyse market data or the recommendations in its Mortgage Market Review.

The CML says: “The process of structural adjustment should be allowed to continue alongside progress towards global prudential reform and improvements in the eco nomic backdrop.

“A clearer understanding of the causes of consumer detriment is needed and before pressing ahead with further changes the FSA will need to apply a rigorous cost-benefit analysis to its proposed reforms, informed by market data.”

The CML has also warned that the mortgage market could face a £300bn funding gap in 2014 when the government’s special liquidity and credit guarantee schemes end. The trade body says that extra lending in the sector is being propped up by these schemes.

But it adds: “By 2014 both these schemes will have expired.

Hanging over the market is uncertainty concerning how lenders will refinance this £300bn over time.”

The CML says the gap cannot be filled by retail deposits alone.

It says: “The best outcome would be for funding to emerge from the restoration of a private sector wholesale debt market.

But if investors are to return they will need to feel confident that issues left by the fallout from the crisis have been addressed.”