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Shapps slams 'pernickety' proposals on sensible lending

29 November 2010
Written by rosalind renshaw

Housing minister Grant Shapps has given his clearest indication yet that he is opposed to the Financial Services Authority's proposals on 'sensible lending'.

He likened them to closing the door after the horse had bolted and said the “pernickety” proposals could be a step too far.

He also suggested that the proposals, which critics have said would severely limit levels of lending, would not even prevent problems of the past recurring.

Answering delegates’ questions at the National House-Building Council’s annual lunch, he said: “Look, I’m absolutely clear about this. I think it was at the moment when I realised that I would not have a mortgage if the MMR changes went through, that I kind of thought this might be going a step too far and there’s no point in closing the door after the horse has bolted.

“The problem with the mortgage market was not some sort of pernickety issue to do with whether the FSA or anybody else was talking about whether you could lend X or Y percentage and what form you had to get the end user to sign.

“It was because there was a lack of central regulation on the way the banks were operating, on their ability to carry on operating even after they did not have the balance sheet to do it, as Northern Rock and RBS and people like that were doing.

“So, what is required here is proper, sensible, top-level regulation, not pernickety, down in the dirt, kind of ‘what you can and what can’t do’ as a mortgage company.

“I hope that the FSA will be getting that message from you and everyone else.”

He concluded: “I think it is very important we learn the lessons of the past without, in effect, repeating them, which is what I think they are in danger of doing.”

The Council of Mortgage Lenders recently called for a political debate on the Mortgage Market Review.

Comments

  • icon

    Right,

    Ive been thinking about this House Price Crash website and ive ‘gone native’…..those guys on there deserve a house at a price they can afford, and ive thought of something I want so im starting;

    www.rangeroverinmybudget.com

    Just been into a Range Rover dealer, you will not believe the bloody price of those things, they are over £70 grand, how the hell can I be expected to buy one of those at that price, all I want to do is have something I can take the kids and dog out in and go to work, its my right they were only £5k in the 70’s when they came out, what has changed??

    Well ill tell you, its Gordon Brown and all that lot, driving the prices up, inflating the bubble, and the salesmen flogging cheap finance over the last 10 years to any idiot willing to have one at these stupid prices.

    Im not going to rest until they are a sensible price, im not having it, £70k is mental, im doing a graph that shows my prediction on the price of these, when, and I do mean when, they get to £35k I might have one, that’s if there are any Range Rover salesmen left, I hate em, its all there fault (and Tony Blair)

    Now who’s with me, if the HPC guys think they can influence the market then so can I…………………ive also just seen, a dealer in Loughborough has got an ex demo with a £4k discount, so I reckon prices are dropping, this proves it – eh, told ya, there’ll be another £4k off them by next week!

    Jonnie

    • 30 November 2010 16:45 PM
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    Shame he was doing well till now. These changes are needed.

    Just because Ray Boulger has a hissy fit on all media possibly doesn't mean he is right. Remember it was self cert/liar loans and interest only which were a major part of the housing bubble.

    Just because the horses have bolted it doesn't mean we shouldn't shut the gate especially when more horses can run out.

    Long live the MMR and down with Boulger.

    • 29 November 2010 19:08 PM
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    Notwithstanding tougher lending criteria, I wonder where people think the banks are going to get the money to lend to sustain the market? The days are gone where you could parcel up a 100 million of mortgages and play pass the parcel between the banks lending the same money over and over again.
    Savers have no interest in saving (literally, they get no interest worth having) so - WHERE is the money to lend going to come from.
    I know it's old fashioned, but banks do actually need savers before they can lend to borrowers.

    • 29 November 2010 17:03 PM
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    "there’s no point in closing the door after the horse has bolted."

    Actually there is if you have just asked tax payers to cough up £700bn in order to get the horse back in the stable.

    • 29 November 2010 16:46 PM
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    Phew! Great news. The MMR should be the biggest issue property & estate agency at the mo. Let's hope Ernest Borgnine sorts it.

    • 29 November 2010 11:07 AM
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    First sensible comment Grant Shapps has made!

    • 29 November 2010 10:46 AM
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