“First time buyers are vital to a buoyant property market and it’s essential their lending needs are catered for.
“We got into this mess in the first place because of careless and nonsensical lending in an over-valued property market, whereas lenders today have adopted a much more prudent approach in what’s considered a more attractive property market.
“Lenders should not allow the government to dictate their lending criteria. Rather the FSA should focus on challenging lenders to ensure they’re operating comfortably within a stable and predictable property market.
“As the market recovers, loans at 90 per cent or even 100 per cent should be considered ‘safe’ by lenders, as equity incrementally grows inline with rising property prices. However, while caution should always be exercised when dishing out loans of up to 100 per cent, lenders should be allowed to stimulate the property market by defining their own lending criteria and setting their own LTV’s.
“Our recent research on the UK property market revealed that over 5.2 million people are looking to buy their first property in the next six months, compared to the 675,000 homeowners who are looking to downsize. However, of the 1,579 mortgages currently available from prime lenders, almost 90 per cent require a deposit of 20 per cent or more.
“Whether the FSA’s mortgage cap plan will bring new hope to the millions of people looking to buy, only time will tell.”
