The problems in the mortgage market should be solved by closer supervision of banks rather than by banning particular mortgage products, the leading trade group for mortgage brokers will tell the Financial Services Authority today.

The Association of Mortgage Intermediaries, which represents the advisors who link would-be borrowers with lenders, argues in a new report seen by the Financial Times that lenders, not the government, should decide whether particular loans make sense.

The group hit out in particular at the idea of putting limits on the ratio of a loan to the value of the property that secures it, as well as limiting the size of the loan relative to the borrowers’ income.

Financial Times