Grant Shapps says the MMR paper is a step too far

by Aaron Strutt

Dec 01 2010

Housing minister Grant Shapps has said that he though that the Financial Services Authority's Mortgage Market Review (MMR) paper is "a step too far."

Speaking at the National House-Builder Council conference, Mr Shapps says that he would not be able to get a mortgage under the current proposals. He is quoted as saying: "I am absolutely clear about this. I think it was at the point when I realised that I wouldn't have been able to get a mortgage if the MMR changes went through that I thought this might be a step too far."

"There's no point in closing the door after the horse has bolted. The problem with the mortgage market was not some pernickety issue with whether you get X or Y percentage or what form you get the end user to sign. It was because there was a lack of central regulation on the way the banks were operating and their ability to carry on operating even after they didn't have the balance sheet to do it, as Northern Rock and Royal Bank of Scotland were doing. I hope the FSA will be getting that message."

The FSA have issued consultation papers in an attempt to clean up the mortgage industry. They have caused a real stir in the market and many fear that the steps that they are suggesting will have a negative impact. Santander UK have said that they feel the FSA already have the power to clamp down on the market and that they do not think the review is necessary.

Mr Shapps's comments are very welcome and it will be interesting to see how he will be working with the FSA to make his thoughts clear.

November 27, 2010