Surprisingly, this time Council of Mortgage Lenders has appeared talking about the fall in house prizes.
A warning has been issued by CML that if regulators will restrict mortgage lending, house prices will plunge.
The Chairman of the Financial Services Authority, Lord Turner has notified in his speech at the Mansion House that in order to put off careless lending, the new banking regulation would entail the power to contain loans to the original value.
The CML's Director General, Michael Coogan says, “This is just one of a number of unintended consequences of the FSA's well-meaning but misguided proposals that the CML believes the UK's existing 11 million mortgage borrowers have every right to be concerned about”.
He also said that it has been well accepted by the FSA that tougher lending requirements may lead to fall in house prices.
The most important warning of Cooger is that the security of lenders will be decreased, if prices drop again. If the mortgage rationing would persist and level of lending will be restricted, people will not make it to purchase their own homes.
In addition to this, it has been underlined by the research carried out by the National Housing Federation that parents will be pleased if the prices of homes will fall, as it would help their children, who live in rented accommodation, to buy their own homes.