Strict new controls on mortgage lending are crucial if Britain is to avoid further house price bubbles in the future, a leading think tank with close links to the Government will say today.
The Institute for Public Policy Research will argue that mortgage lenders must be made the subject of mandatory curbs on the scale of home loans if the country wants to avoid making the mistakes that lead to the credit crunch all over again.
In particular, the IPPR will say all home purchases should be made with at least a 5% deposit, which would effectively ban 100% mortgages. It also wants to see a limit on house price to income ratios, possibly of 3.5 times joint incomes, a complete ban on self-certified mortgages, where borrowers do not have to provide proof of income.
The IPPR is also calling for more stringent restrictions on buy-to-let lending.