Structural shift
In its series of reports, IMLA seeks to emphasise that the UK mortgage market has undergone a structural shift. While there has been a “robust recovery in lending volumes since the low of 2010”, it argues that the market is still not functioning as expected. Record-low mortgage rates have been accompanied by loan-to-value ratios well below the pre-crisis era, and cash purchases play a bigger role.
The report describes these issues as “symptoms of a market that has failed to support” FTBs and those moving up the housing ladder. It adds that issues such as tighter affordability criteria and limits on lending at higher loan-to-income rates have helped to create a market that is “constrained” in its ability to help these groups of buyers.
IMLA concludes that in the wake of a slowdown in the recovery of the market, regulators should reassess the costs and benefits of the current regulatory structure, since “the costs for those locked out of homeownership can be considerable and lasting”.
