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by Becky Barrow
One in two homeowners with a mortgage could be crippled by changes proposed by Britain’s financial regulator, a major research report has warned.
The worrying prediction raises fears of a country of ‘mortgage prisoners’ who either cannot get a loan, or cannot remortgage their current deal.
The research, published yesterday by the Council of Mortgage Lenders, warns around 50 per cent of Britain’s 11.4million people who have a mortgage could be affected.
To make matters worse, a further 30 per cent of people with a mortgage, equal to around 3.4million, will be able to borrow less than they need. The changes pose a worry for millions of homeowners whose loan is coming up for renewal, such as a three-year fixed deal which is about to end.
The CML fears that homeowners will not be able to remortgage to a rival bank or building society due to the new rules proposed by the FSA.
Under the proposals, radical changes will be made to who can get a mortgage, how much they can borrow and what type of mortgage they can take out.
The proposals could signal the death of interest-only and self-certification mortgages, according to the study.
Michael Coogan of the CML said the new rules are ‘an over-reaction to past problems’, warning: ‘As a consequence, they will not lend to as broad a range of potential customers.’
http://www.dailymail.co.uk/news/article-1326745/New-bank-rules-create-5-5million-mortgage-prisoners.html