CML: Mortgage market must focus on key areas

Speaking at the CML annual lunch Terrington said focusing on those key areas and placing consumers at the core of individual business models would help deliver a healthy, sustainable and thriving housing market.

Terrington said: "We want an industry where UK consumer’s interests are at the core of lender business models and we want to develop an open relationship with the regulator in trying to achieve this objective.

“We want to achieve this because for lenders it helps remove or at least reduce uncertainty and that will only help to create a stronger lending community which is more confident in itself and more confident to lend to customers."

Terrington said that understanding the motives of customers and the wider community is key to reaching this goal.

He continued: "We as an industry and the government need to do more to understand the motives and actions of our customers and citizens respectively.

This will help the development of policies. It may challenge those traditional views of lender’s unwillingness to lend, rather than a consumer’s unwillingness to borrow, always being the problem."

But he said a balance must also be struck between regulation and creativity and innovation.

"Customers of the future will benefit from the lessons learnt during the credit crunch years and also from both the regulatory and cultural change currently underway in the mortgage industry.

“On the way through, though, we must avoid crushing creativity and innovation, which we hope will emerge as market conditions heal.

"The market as a whole will benefit from the right balance of free market principles and sensible protection, allowing businesses to thrive, consumers to transact confidently and lenders to lend with predictable consequences, without shifting goalposts."

But the government and the regulators have a key role in ensuring certainty exists within the market.

He added: "To achieve this, though, we need government, through its various offices including HM Treasury, the Bank of England and the regulators to provide certainty and clarity in their policies and rules, so that the businesses and consumers of this country have a firm, solid foundation for the future."