MP issues fresh warning on regulatory reform
Published: 18 October 2011 | Author: Bernard Clarke
Labour MP George Mudie has made a renewed call for caution about implementing regulatory reforms as a result of the Financial Services Authority’s (FSA) ongoing mortgage market review.
Speaking in last Wednesday’s opposition debate in the House of Commons on measures to promote growth and boost employment, Mr Mudie, the MP for east Leeds, aired the problems created for young, would-be first-time buyers by requirements for an average deposit of 20% of the property’s value.
With the Land Registry reporting an average house price in England and Wales of just over £160,000, the requirement for a deposit of £32,000 has "knocked house purchase off the table" for many young buyers, the MP argued. Mr Mudie acknowledged that deposits of a size to "protect people from being irresponsible" were prudent. But he added: "As we are not building social housing, it is a real block."
Mr Mudie urged the chancellor to require the FSA and banks to "look at each case on its merits."
Mr Mudie’s comments are the third occasion on which the MP has voiced concerns about the impact of regulatory reform being introduced by the FSA. A year ago, he blamed a lack of mortgage availability on the uncertainty created for lenders by reforms the FSA may be planning to introduce.
And, in February this year, he said there was a danger the FSA could over-react to criticism of past regulatory failings by implementing unnecessarily robust reforms that could potentially damage the mortgage industry and "damage young kids getting a start with a new house because of all the regulations."