Cap on mortgage lending "futile"

Date:Wednesday 18th March 2009
Author: Max Freedman

Placing a cap on mortgage lending would be "futile" and would serve to the detriment of first-time buyers, it has been claimed.

According to Richard Mason, managing director of, as the housing market recovers, mortgages at 90 per cent and even 100 per cent loan-to-value should be considered as safe by lenders as equity grows in line with rising property prices.

He was making his comments in anticipation of a review by the Financial Services Authority, which is expected to recommend a number of things, including a restriction on the amount homebuyers can borrow of three times their annual salary.

Mr Mason said: "We got into this mess in the first place because of careless and nonsensical lending in an over-valued property market, whereas lenders today have adopted a much more prudent approach in what's considered a more attractive property market."

He went on to say that introducing a mortgage lending cap now would be a case of "closing the stable door after the horse has bolted".