Housing analysts have warned that as many as 10% of borrowers will be denied mortgages as a result of new rules on lending set by the Financial Services Authority
Robin Hardy, an analyst at KBC Peel Hunt, has estimated that between 5% and 10% of the people currently applying for home loans will not not be eligible under the new rules.
He added that the rules would vastly slow down the approvals process.
The rules, proposed this week, ban self-certification mortgages whereby the buyer does not have to prove their income and right-to-buy mortgages would be regulated for the first time. The FSA said it would require banks to focus on the income that would-be home buyers had available after other outgoings.