The Financial Conduct Authority\u2019s loan-to-income limits won\u2019t make a big difference and feels like more of a pilot.<\/p>\n
That is according to Tom Davies, group financial services managing director of estate and lettings agency LRG.<\/p>\n
Lending at a loan-to-income level above 4.5 times is limited to 15% of a lender\u2019s book, though the threshold in which this applies has today been increased to lenders with more than \u00a3150 million of loans, up from \u00a3100 million.<\/p>\n<\/p>\n
Davies said: \u201cThe FCA\u2019s decision to raise the loan-to-income cap threshold is a step in the right direction, but it\u2019s unlikely to have a significant impact in the short term. The change only applies to a small group of lenders who fall just below the new \u00a3150 million lending threshold \u2013 the vast majority of lenders are unaffected.<\/p>\n
\u201cIn that sense, this feels more like a pilot, to gather, monitor behaviour, and assess the impact of loosening the cap if applied more widely. That approach makes sense. It\u2019s cautious, but it gives regulators time to test outcomes before making larger systemic changes.<\/p>\n
\u201cWhat we\u2019d like to see next is broader reform that addresses the real affordability barriers buyers face. Raising the cap is only beneficial if it genuinely helps people to borrow more responsibly. Without matching improvements to housing supply and planning reform, changes like this, while welcome, won\u2019t move the needle on their own.\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
The Financial Conduct Authority\u2019s loan-to-income limits won\u2019t make a big difference and feels like more of a pilot. That is according to Tom Davies, group financial services managing director of estate and lettings agency LRG. Lending at a loan-to-income level above 4.5 times is limited to 15% of a lender\u2019s book, though the threshold in […]<\/p>\n","protected":false},"author":1,"featured_media":1443,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n