The Council of Mortgage Lenders (CML) has ‘welcomed and broadly supports’ the revised package of proposed reforms in the recent consultation paper from the Financial Services Authority (FSA).

The CML says it had previously been extremely concerned that the FSAs earlier proposals (CP 10/16) would have had a disproportionate and detrimental effect on consumers in the mortgage market, as well as on lenders. In contrast it now believes that the FSA has listened to those concerns and has refined a far more workable and appropriate set of measures which will enable consumers to be able to get mortgages suitable for their needs, within a regulatory approach which provides sensible safeguards.

While there are bound to be specific aspects of the consultation that will require a detailed industry response, the CML says it is pleased that the FSA has recognised both the principle and practical difficulties that would have arisen from the earlier proposed package of measures.

"Lending needs to be responsible and done in a way which protects consumers,” says CML director general Paul Smee. “Rules need to be practical and avoid unintended consequences. Whilst there is much detail to be pored over, the FSAs new proposals seem to strike broadly the right balance.

“If lenders are to make their contribution to improving the supply of housing and to the wider agenda for economic growth, then they need a regulatory framework which also supports that objective.
"We look forward to working with the regulator to iron out any remaining wrinkles and to move towards a smooth process for implementation. Ideally, this would take account of the European legislative proposals too, so that as far as possible the costs of regulatory duplication are avoided."