More homes is the key to market stability: Smee

Speaking at the Council of Mortgage Lenders’ Mortgage Industry Conference and Exhibition today in London, the CML’s director general said: “We do not simply want any increase in house market activity simply to lead to price increases in existing stock.”

While hailing the government Help to Buy scheme’s equity loan initiative, he added that the number of new homes was “still not sufficient”.

Mr Smee also used his speech to forewarn of the “constitutional wrangling” that could follow the EU’s upcoming directive on mortgages.

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He said: “The government should robustly assess what risks flow from an implementation approach that addresses the substance of what the directive is trying to achieve.

“It should be less concerned with prissy detail.

“An industry which has gone through the upheaval that MMR has generated and which has, as a consequence, ended up in a place where the objectives behind the directive are largely already in place, does not deserve a new string of detailed, costly and time-consuming changes.”

Earlier, Linda Woodall, director of mortgage and consumer lending at the FCA, said one of the regulator’s main priorities was to ensure that firms complied with new responsible lending rules brought in by the MMR.

She added that conduct risk, and how lenders considered customer outcomes such as suitability, would be among its main areas of scrutiny.