Commenting on today’s recommendations from the Financial Policy Committee, the Financial Conduct Authority said:
"Following the FPC’s recommendations today, the FCA will consult on general guidance which will provide details on how we propose to follow the recommendation on loan to income ratios. This will include how we will calculate and apply the de minimis £100 million threshold and the ratios.
"This will only affect a small number of FCA regulated firms so general guidance is considered a proportionate and appropriate approach to implementing the loan to income ratio, especially whilst the industry continues to adjust to the Mortgage Market Review.
"With respect to the FPC’s recommendation on interest rate stress testing, our mortgage rules require firms to have regard to FPC recommendations on stress test levels. We expect lenders to have regard to what the FPC has said today.
"The FPC’s recommendations come after the introduction of the MMR in April and are consistent with our aim to hard-wire common sense into mortgage lending and ensure that mortgages remain affordable for consumers if interest rates rise in line with market expectations."
Copyright © 2016 FCA. All Rights Reserved.