Five questions answered on the new mortgage rules

Will affect 1 million borrowers.

The FSA has announced they will be introducing a new set of rules for mortgage lending. We answer five questions on these new rules.

What is the basic gist of the new rules?

Borrowers must satisfy mortgage lenders they can repay the mortgage – mortgage lenders must in turn check these assurances. Those looking to borrow from an interest only mortgage must prove they are not relying on rising house prices alone to repay the home loan. There will be no age limit on taking out a mortgage. If you earn more than £300,000 or have more than £3 million in assets you will face a less stringent assessment. Borrowers trapped in old mortgage deals will be given some leeway to remortgage, despite these new laws.

Why are the FSA introducing these new rules?

To curb risky lending. The FSA want to encourage more responsible lending and borrowing in the mortgage market to avoid a repeat of risky lending that saw many homes on the brink of being reposed during the financial collapse.

When these new regulations come into action?

These new regulations will come into effect on the 26 April 2014. However, many of these practices are already being used by mortgage lenders.

What will this mean for people trying to get on the property ladder?

That it will be a longer, more thorough process getting a mortgage and self-certified mortgages – where the lender does not seek proof of income – will effectively be ruled out. This may make it harder for around 11.3 per cent of borrowers (1.3 million) and in particular self-employed workers to get a mortgage.

What have the FSA said?

Martin Wheatley, managing director of the FSA and CEO-designate of the Financial Conduct Authority (FCA), said: “These new rules will help create a more sustainable market that works well for everyone, whether they are a borrower or a lender.

“We recognise that many lenders are now using a far more sensible set of lending criteria than before, but it is important that these common sense principles are hard-wired into the system to protect borrowers.

“We want borrowers to feel confident that poor practices of the past, which led to hardship and anxiety, are not repeated.  At the heart of the new measures is an affordability test to check borrowers can meet the repayments of the mortgage they want.

“To ensure the measures are effective but practical we spent a great deal of time discussing our proposals with consumers, firms, parliamentarians and numerous other stakeholders. I am therefore very confident that we have come up with a set of rules that are proportionate and sensible, and will create a more sustainable mortgage market where consumers are put at the heart of every decision.”

The FSA have announced new rules. Photograph: Getty Images

Heidi Vella is a features writer for

Grant Shapps on the campaign trail. Photo: Getty
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Grant Shapps resigns over Tory youth wing bullying scandal

The minister, formerly party chairman, has resigned over allegations of bullying and blackmail made against a Tory activist. 

Grant Shapps, who was a key figure in the Tory general election campaign, has resigned following allegations about a bullying scandal among Conservative activists.

Shapps was formerly party chairman, but was demoted to international development minister after May. His formal statement is expected shortly.

The resignation follows lurid claims about bullying and blackmail among Tory activists. One, Mark Clarke, has been accused of putting pressure on a fellow activist who complained about his behaviour to withdraw the allegation. The complainant, Elliot Johnson, later killed himself.

The junior Treasury minister Robert Halfon also revealed that he had an affair with a young activist after being warned that Clarke planned to blackmail him over the relationship. Former Tory chair Sayeedi Warsi says that she was targeted by Clarke on Twitter, where he tried to portray her as an anti-semite. 

Shapps appointed Mark Clarke to run RoadTrip 2015, where young Tory activists toured key marginals on a bus before the general election. 

Today, the Guardian published an emotional interview with the parents of 21-year-old Elliot Johnson, the activist who killed himself, in which they called for Shapps to consider his position. Ray Johnson also spoke to BBC's Newsnight:


The Johnson family claimed that Shapps and co-chair Andrew Feldman had failed to act on complaints made against Clarke. Feldman says he did not hear of the bullying claims until August. 

Asked about the case at a conference in Malta, David Cameron pointedly refused to offer Shapps his full backing, saying a statement would be released. “I think it is important that on the tragic case that took place that the coroner’s inquiry is allowed to proceed properly," he added. “I feel deeply for his parents, It is an appalling loss to suffer and that is why it is so important there is a proper coroner’s inquiry. In terms of what the Conservative party should do, there should be and there is a proper inquiry that asks all the questions as people come forward. That will take place. It is a tragic loss of a talented young life and it is not something any parent should go through and I feel for them deeply.” 

Mark Clarke denies any wrongdoing.

Helen Lewis is deputy editor of the New Statesman. She has presented BBC Radio 4’s Week in Westminster and is a regular panellist on BBC1’s Sunday Politics.