The CML’s latest News and Views newsletter claimed that the bank’s decision to concentrate the scheme on business lending “may avoid the need for much more intrusive, and potentially disruptive, action later on”.
Citing increased stability among mortgage lenders, it added that most providers had already anticipated increased underwriting standards that will come into force when the mortgage market review is implemented in April.
The newsletter claimed “an adequate supply of mortgage funding was now less dependent on support from Funding for Lending”.
It also revealed that the CML’s members recognised and supported the Bank’s use of tools, such as requiring lenders to hold more capital, and recommendations on maximum loan-to-value ratios to target the emergence of risks from the housing market and its readiness to intervene.
It added: “Firms and consumers will benefit in the long run from greater stability if the Bank opts for the right kind of regulatory intervention.”
Adviser View
Jane King, principal of London-based Ash Ridge Asset Management, said: “I have spoken to a few lenders this week and they say they have enough money from the scheme stashed away that will let them continue lending as they are. My concerns are for the smaller building societies which may eventually have to raise rates.”
