Paul Smee, director general of the trade body, said the industry should be asking whether it can develop products to help fund housing that don’t submit to the traditional mortgage model.
He said: “There is lots of product out there built round a similar model. There should be the opportunity to say: what else could we do?
“Housing finance is about more than just providing residential mortgages and our members are about more than that too. That’s where I think new thinking will come from.”
He said there should be a space for the CML to talk about whether there are different ways of meeting housing finance needs than are currently on the table.
“The answer may be no because we have a very competitive and bubbly market and there are already people looking at ways of doing things differently but I think it’s a debate it’s important to have,” he added.
Peter Williams, executive chairman of the Intermediary Mortgage Lenders Association, said innovation was critical to support homeownership which could fall sharply otherwise.
And he added: “IMLA members have always been at the forefront of innovation. However, apart from buy-to-let, the specialist market has collapsed in the wake of the financial crisis with the credit squeeze and the shift in regulation requirements equally responsible for the decline.
“If we do not see an uplift in innovation, bringing choice back to consumers who presently have very little, the decline we have seen since 2002 in owner-occupation will become sharper still putting greater pressure on the private and social rented sectors.”
David Hollingworth, associate director of communications at London & Country, raised regulatory concerns.
He added: “Any changes from a regulator will undoubtedly generate concern that any tougher rules designed to improve protection for the consumer will have the side effect of removing the ability to innovate.”
Robert Sinclair, director of the Association of Mortgage Intermediaries, said the broker trade body was happy to contribute to a debate on innovation.
He said: “We will fully support the CML in any work to develop new models to increase the supply of houses, funding and mortgages. That is in the interests of UK plc and all consumers."
