Could demand rise for flats to rent in London if lending is restricted?
Demand for flats to rent in London could grow if Financial Services Authority (FSA) proposals come into effect, as one expert has said this would make home loans less accessible.
Ben Wilkie, editor of What Mortgage, argued people could be "frozen out" of the market if regulations are tightened.
The FSA proposed affordability tests should be conducted for all mortgage applicants, while every customer's income should be verified.
It would be the responsibility of the provider to assess whether or not a consumer will be able to repay a home loan.
The Council of Mortgage Lenders (CML) recently responded to the body, warning 3.8 million "good" loans would not have been awarded in the last five years if the proposed legislation had been come into effect in 2005.
Mr Wilkie shared the CML's concerns, commenting: "There is a danger that it [the market] is going to become over-regulated."
first-time buyers would be one of the many groups of people that could find it harder to obtain a home loan if the proposals are brought in, the specialist cautioned, which could see them continuing to rent flats in London.
Posted by Martyn Glynn
Published 11th October, 2010
© 2010 Estates IT Limited
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Flats to rent in London may see greater tenant demand, as it has been argued proposals by the Financial Services Authority would restrict lending.