Tougher regulation by the Financial Services Authority will make is even harder to secure a mortgage for UK buyers . The Financial Services Authority (FSA) planning even tougher regulations in early 2011, senior figures within the industry are claiming that the housing market faces ‘an abyss’ if these new proposals come into force.
The FSA plans to:
- Restrict the amount lent to borrowers
- Outlaw ‘self-certified’ mortgages
- Calculate affordability based on repayment rather than ‘interest only’ mortgages
- Ban ‘fast-track’ underwriting
This means that it will become much more difficult to secure a mortgage, particularly if you are self-employed or if your income has reduced since you took out your current loan. Analysts estimate that up to one in five borrowers will not be able to remortgage under these new rules.
