UK Lending standards 'more rigorous than in US'

Mortgage lending in the UK is of a much higher standard than in the US, according to the Intermediary Mortgages Lenders Association (IMLA).

Following the government''s Financial Stability Report, the IMLA said: "Lending standards in the UK have been more rigorous than in the US and the rise in possessions is largely due to a worsening credit environment rather than poor lending."

The IMLA claims that lax lending standards in the US coupled with plummeting house prices has crippled confidence in the residential mortgage backed securities market.

In the UK the securitisation model is down but not out, the organisation states.

According to the Council of Mortgage Lenders, the quality of underlying mortgage credit in Britain has never been the primary issue at the heart of the liquidity problems faced by borrowers.

However, the CML claims the reduction in new lending is having an impact on existing mortgages.

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