Tougher mortgage rules backed by first-time buyers

 

Three-quarters of first-time buyers believe banks must lend responsibly despite the fact it will stop some people getting a mortgage, Shelter has revealed.
The exclusive YouGov poll shows just how much the majority of people wanting to get their first step on the housing ladder support stronger mortgage regulation.
Shelter is currently calling on the Financial Services Authority to implement reforms set out in the Mortgage Market Review and for the Government to support this.
The survey also found that 79% of first-time buyers think banks and building societies lent irresponsibly before the credit crunch and more than a third (38%) do not think they can be trusted to lend responsibly in the future.
The spiralling cost of housing means that many first-time buyers would have to overstretch to get a foot on the ladder. But survey respondents did not agree that easy credit was the answer to overpriced housing with more than eight out of ten first-time buyers (84%) believing that banks should only offer mortgages to borrowers who can prove they can afford it.
Other findings from the survey, which provides a unique insight into first-time buyer attitudes towards mortgage lending, include:
* 83% strongly agreed that lenders should check a borrower’s income before giving them a loan;
* 75% believe banks should make sure borrowers have enough cash to pay the mortgage once other costs have been taken into account;
* 53% of first time buyers agree the high cost of homes, not the availability of credit (41%), is the biggest barrier to them getting on the ladder;
* Nearly a third (28%) said they had been offered a bigger mortgage than they had asked for, or knew someone that had.
Campbell Robb, chief executive of Shelter said: "This survey shows people really want simple, common-sense rules in place to ensure people borrow money responsibly. What is most striking is the level of support among first-time buyers who clearly want greater protection and are well aware it might limit their chances of getting mortgage credit in the future.
"So far the voice of the consumer has been completely drowned out by the mortgage industry, when in reality it is this very group who most recognise the need for stability in the market. We must not let banks go back to the old ways of irresponsible and reckless lending."