"While much of the detail in the paper is sensible, we have significant reservations about the possible unintended consequences of some of the ideas expressed. We need a sensible balance between appropriate regulation and allowing people to buy their own home when they can afford to do so.
"The vast majority of the British population aspire to home ownership and these proposals must not frustrate the sensible ambitions of potential homeowners.
"We are pleased that the FSA is not setting maximum loan to income or loan to value ratios. We welcome the FSA's recognition that lenders need to focus on borrower's levels of disposable income.
"However, while we believe this is a sensible approach, we remain concerned about how the FSA will implement these requirements in practice.
"We believe that home ownership is something that should be encouraged, and it is vital that lenders retain the flexibility to respond to the very individual financial circumstances of individual borrowers.
"We also welcome the FSA's commitment to examine the extension of its prudential rules to non deposit taking lenders. This would represent a significant levelling of the playing field, and building societies welcome the opportunity to compete fairly with such organisations.
"We have always regarded self certification mortgages as a niche product for a very small group of borrowers, and don't believe that such mortgages should have reached a market share of anywhere near 45%.
"However, such products are suitable for a minority of people, and an outright ban is not appropriate."
