Borrowers 'may be subject to increased checks'
Mortgage lenders will have to carry out more comprehensive credit checks of potential borrowers, under new proposals from the Financial Services Authority.
It is hoped the proposals will clamp down on irresponsible lending, although first-time buyers may be concerned that this could hinder their chances of buying a home.
With this in mind, it could be said that flats to rent in Kensington or another part of London are a more affordable alternative to buying.
Commenting on the news, Katie Tucker, technical manager at mortgageforce, said: "Lenders' credit scoring is already painfully stringent for first-time buyers now."
She added that while such regulations can have benefits, a blanket regulation can be a "very expensive and inefficient way" to impose lending rules.
The Financial Services Authority has also proposed banning self-certified mortgages and arrears charges if a borrower is already repaying.
Meanwhile, the Council of Mortgage Lenders recently reported that the number of new mortgage approvals decreased by five per cent in August 2009.
Written by Ben Carter
Published 20th October, 2009
© 2009 Estates IT Limited
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People searching for property may be subject to increased credit checks, it has been revealed, which could make things difficult for first-time buyers.