As we have mentioned on numerous occasions over the last few weeks, the Financial Services Authority (FSA) has been targeting the UK mortgage industry and looking to tighten the regulatory belt around this particular sector for some time. It would appear that in the years ahead, mortgage lenders will be directed to ensure their customers are able to cover future mortgage payments using various calculations and financial tests. So what can we expect in the future?

The truth is that the UK mortgage market would very much remain on the back foot for the short to medium term with more and more companies struggling to bring in new customers under the new guidelines. Indeed, we have already seen a significant increase in deposit requirements before customers are even able to apply for some of the more attractive mortgage rates in the market. This has effectively barred first time homebuyers from the market, which anybody in the property industry knows are the life and blood of the sector.

Whether these restrictive regulations will hold in the longer-term is a matter for open debate because ultimately unless the UK financial market is able to grow it will lose pace with competitors overseas and ultimately lose business. When you consider the UK financial sector is the leader in UK economy the UK government can ill afford to strangle this particular monster.

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