The recent measures announced by the Financial Policy Committee featured in this weekend’s financial press, with the Financial Times and Mail on Sunday reporting on the potential impact on borrowers. Experts suggested that a cap on the number of loans over 4.5 times income should prevent out of control lending but shouldn’t necessarily affect the willingness to lend, as affordability is now the key to anyone securing a mortgage, rather than income multiples. The Sunday Times revealed a steep increase in the number of fixed rate deals taken this year amid concerns that rates could rise earlier than expected. Smaller banks and building societies, including Post Office, Virgin Money and Tesco Bank have seen an increase in their business levels since the introduction of stricter affordability rules in recent months, often due to their more flexible approach to underwriting, a trend which is set to continue. Elsewhere, the Independent on Sunday looked at the declining number of options for parents looking to assist their offspring in purchasing their first home. The number of available guarantor mortgages has dropped considerably this year, but lenders such as Woolwich and the Market Harborough Building Society still offer good alternatives.
What the papers say – 28th and 29th June 2014