£30,000 extra for mortgage borrowers

- FCA chief

- SION BARRY Business editor [e-mail]

MORTGAGE lenders have said they can now lend around £30,000 more to the average borrower due to changes to affordability rules, the chief executive of the Financial Conduct Authority (FCA) has said.

Nikhil Rathi said the changes were judged “a risk worth taking.”

He was giving a speech in which he highlighted the need for financial capability - the knowledge, confidence and support to make good choices and avoid bad ones.

Mr Rathi said: “Lenders have told us that they can now lend around £30,000 more to the average borrower as a result of our changes to mortgage affordability rules.

“We judged this a risk worth taking, allowing more people the security that comes with home ownership.”

Many lenders have recently made changes allowing some homeowners to borrow more, following clarification from the FCA.

In June, the FCA also launched a “public conversation” on the future of the mortgage market as part of work to help consumers navigate their finances and to support economic growth. Feedback on its discussion paper closed in September.

The regulator has been looking at whether there is more that can be done to help first-time buyers, people who are long-term renters with aspirations to get into the housing market, as well as people in later life who may have significant equity in their home.