According to Reuters (13. 7. 10) FSA are to ban ‘self cert’ mortgages as new rules will require evidence of income to be produced. 'Self cert' mortgages are where a borrower has obtained a mortgage by self certifying his income, i.e. they have not produced evidence of their income to the lender. 'Self cert' mortgages played a major role in instigating the credit crisis. This will have a huge impact on the property market since a vast number of properties are bought or remortgaged with mortgages obtained on a self certified basis.
The conveyancing market has taken a good thrashing during the economic downturn and things did look like they were improving with the property market showing signs of recovery over the last few months. However, the banning of self cert mortgages will undoubtedly reduce the number of buyers in the property market and property prices will decline. It has been reported that lenders fear the property market will not recover for a whole decade as lenders tighten lending criteria and the number of buyers in the property market fall away.
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