The Financial Services Authority is planning to introduce new rules that will enforce lenders to ensure borrowers can afford a mortgage before committing themselves to a loan.
The rules are likely to include a ban on self-certification mortgages, which enable borrowers to certify their own income, although the FSA has decided against capping loan-to-value ratios and income multiples
The Council of Mortgage Lenders has revealed that first-time buyers' average income multiple underpinning their mortgage has declined from 2.85 times income to 2.74 in the year to August 2009 while the average amount of the value they borrow against their first home has declined from 71% to 66%.
