Speaking at the Mortgage Expo at the Olympia Conference Centre in London, Peter Williams, executive director of IMLA, argued that the industry needed to address the underfunding of mortgages rather than becoming obsessed with proposals in the MMR.

He said: “Funding remains very significant and may result in permanent exclusion of certain borrowers from home ownership. Lenders are not releasing enough funds because a conservative attitude among banks towards lending is stalling the market. Risk seems to have a strong grip around the throats of lenders resulting in only a very slow increase in mortgage funding.”

Williams also added that proposed rules under the MMR could stall the market further. It will make it harder for lenders to enter the sector, harder for people to get a mortgage and stop innovation which will hinder a market recovery.

Melanie Bien, director at Savills Private Finance, agreed that funding was still the major issue affecting the market as it was making it difficult for borrowers to access the market.

She added: “The MMR is important, but it is more of a side issue at the moment compared to funding. Funding is constraining the market and people are struggling to access the market. It is possible that elements in the MMR may stall the market especially if certain borrowers are excluded.”

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