16
Jun
CML: Mortgage cap shouldn't limit high-risk lending
The Council of Mortgage Lenders (CML) has suggested that the
government's possible mortgage caps should not restrict high-risk
lending.
Director general of the CML Michael Coogan spoke out about the
possibility that the chancellor will allow the Bank of England to
limit the type of mortgages borrowers can receive in the
future.
He suggested that if banks avoid lending money to high-risk clients
it could affect the entire property market, as it might "dampen
risk appetite".
"We … need to remember that what is currently bothering most
people about the mortgage market isn't high-risk lending, but the
fact that lending is so constrained into low-risk borrowers," Mr
Coogan said.
According to the CML, there are 2.5 million outstanding mortgages
that are worth more than 75 per cent of the value of the
property.
He added that risky lending was not the cause of the banks'
problems but their inability to refinance their loans.
Earlier this week, the National Association of Estate Agents
suggested that despite the political changes over the last few
months, the property market has shown encouraging signs by
remaining relatively stable.
