AMI in talks to bring foreign lenders to UK

The AMI (Assocation of Mortgage Intermediaries) says foreign lenders are needed to bring much needed funding to the UK mortgage market.

It fears a possible reduction in the size of the wholesale lending market in the UK could lead to costs being passed on to consumers.

One solution is to attract extra funding from lenders based abroad.

Richard Farr, director of the AMI, says: "We need to seek out alternative sources of funding for the UK mortgage market.

"That is why we have been in discussion with the Treasury, the Bank of England, the main political parties and the industry to help bring new lenders into the market from outside the UK."

He says banks should also absorb a share of any extra costs and ensure they are treating customers fairly.

“The extra costs, and the withdrawal of certain mortgage products requiring lower deposits, will make it extremely difficult for first time buyers in particular,” he warns.

Farr says although the mortgage market is going through a period of turbulence as all markets will do, it expects a rebalancing during the course of the year.

"Recent results in the banking sector demonstrate the relative strength of the UK mortgage market in comparison to the US.

Lenders and brokers in the UK have been much more responsible in their dealings with consumers and the underlying credit quality of the assets remains positive,” he concludes.