Large numbers of householders may be “in too deep” with their borrowing, FCA director of supervision Jonathan Davidson said.
Speaking at the Credit Summit in London last week, Davidson said it was “far from certain” that customers who could just about manage loans now, could do so in the future.
“There are a significant number of households that are in so deep that the slightest sign of rough weather could see them in over their heads,” he added.
Davidson stated that one in five mortgages today are interest-only, with many being given to borrowers with little equity in their homes and “not a lot of disposable income”.
Furthermore, the FCA stated that it would take action against firms whose business models were “predicated on selling products to customers who can’t afford to repay them”.
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