The new EU rules for mortgages provide improved protection for consumers, but regulators need to ensure that they are not used to “restrict lending to responsible borrowers”, according to independent financial advisory firm deVere UK.
The European Union’s first common set of regulations on mortgage lending will make lenders verify creditworthiness and customers’ ability to repay.
Kevin White, deVere United Kingdom’s head of financial planning, said: “We are championing these sensible, tighter mortgage rules as they will, we believe, offer greater protection for consumers by preventing a return to irresponsible lending.
“Borrowers need to be assured that the poor practices of the past, which resulted in personal hardship for many and which helped fuel the economic crisis, are not repeated.
“However, regulatory bodies must also be vigilant that the weight of these new regulations is not used to restrict lending to responsible borrowers who do pass the standard creditworthiness assessment.
“The rules need to be applied with common sense and in the spirit in which they are intended, and shouldn’t represent an additional obstacle for those attempting to get onto the property ladder or the self-employed, who sometimes find it difficult to provide audited evidence of their earnings.”
The new EU agreement must now be approved by the European parliament in a vote scheduled to take place on 11 June.