Maximum LTV Cap
Published / Last Updated on 21/09/2010
by Ashley Clark, Director
The Financial Services Authority Chairman Adair Turner has once again suggested that a cap on higher loan to values (LTVs) could be introduced as part of mortgage and consumer credit reforms.
Mr Turner suggested that the new Financial Policy Committee which will be responsible for preventing over borrowing and credit booms could use a possible tool setting a maximum loan to value as part of its control measures.
We suggest this is anti-competitive and all that would actually happen is that overseas lenders regulated outside of the UK may look to fill the gap in the UK with higher LTVs.
We suggest making lenders and mortgage brokers directly responsible for borrowers that get into difficulty or by making redundancy insurance compulsory may be a better answer. We are required by law to have motor insurance why cannot this be the same for mortgages and debt?
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