”It is the shared responsibility of all of us to ensure that any money we borrow can be repaid in full. And it is the responsibility of lenders in this downturn to ensure that as far as possible funds are made available to those who can expect to repay them over time.
”For some time now the banks have been providing the vast bulk of mortgage funding to the market, as many building societies and specialist firms have stopped lending. When they offer mortgages, the UK’s high street banks pay particular attention to their affordability for each individual customer, considering a range of factors which is not limited to salary multiples or loan-to-value ratios. Therefore the banks welcome the FSA’s similar emphasis in this paper on the overall affordability of the mortgage for the customer, and their focus on mortgage broking activity and higher-risk lending.
”It should be a firm principle of mortgage regulation that higher-risk borrowers such as self-employed people and first-time buyers are not effectively cut out of the market. The issue that faces all of us - lenders, borrowers and regulators - is ensuring the risk of taking out a mortgage can be shared effectively. Any new rules must not serve to create unreasonable obstacles either for lenders or for borrowers.”
