Paul Smee, director general of the Council of Mortgage Lenders, said: "This is a radical change and we will need time to consider it and work through the practicalities and logistics. The systems and risk challenges for our members arising from such a change are potentially huge.
"Our members already go to significant lengths to support customers through temporary periods of difficulty, and will continue to do so.
“We will do our utmost, whatever the landscape of state provision, to keep in their homes customers whose problems are temporary and whose circumstances will allow them to get back on track over a reasonable timeframe. But this is a change that could have wide implications.
"Other notable announcements for the mortgage lending industry include the four-year phased reduction of higher rate tax relief on buy-to-let mortgage interest payments. The phasing is important.
“We will need to understand whether this will have a behavioural impact on higher-rate buy-to-let landlords, but a four-year timetable does at least reduce the risk of sudden market shocks."
