FSA plans tough mortgage rules
One in five homeowners could become mortgage prisoners if new lending rules are introduced, new research indicates.
Around 19% of current borrowers would be prevented from moving or remortgaging if the Financial Services Authority presses ahead with tough affordability rules, while a further 30% of people would see a reduction in the amount they could borrow, according to economic and social research consultancy Policis.
The group estimates that within the first year of the rules being introduced, around 483,000 homeowners looking to move and renters wanting to buy a property would be affected, with 150,000 people shut out entirely.
A further 380,000 people who hoped to remortgage during the 12 months would be unable to do so, according to the report.
Overall, the group said the proposals had the potential to impact 5.6 million homeowners - around half of the total.
It said the self-employed, older workers, first-time buyers and people on low incomes would be hit hardest by the changes.
The FSA is proposing banning self-certification mortgages and introducing affordability and income verification checks that lenders would have to carry out under its mortgage market review.