I rather saw this as the FSA imposing some, any, regulation to show itself as “on the case”, with even Lord (Adair) Turner confusing affordability and house price increases on the basis of interest-only mortgages.
While some undoubtedly took interest-only loans without realising, or without fully appreciating, all the angles, I am sure there are many more who will not appreciate having this useful tool effectively removed; those who may have actually wanted to carry a loan into retirement, or who wanted to use it as a short term solution, and others. Many of those buying in London have had their plans of increased equity fully realised.
Okay, repayment mortgages are a sensible way of doing things, but not the only way.
As with the City regulator’s approach regarding lending into retirement, one is left wondering who is doing something for the tenants of this world. Do we subscribe to Mr Coney’s view that they too have been living in (sic) the never-never, so deserve no sympathy? Will their rent suddenly cease on retirement?
Derek Robinson, Director
Derek Robinson Associates, Ipswich
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