Can be ceiling on mortgages from May – VG

FSA has proposed stricter rules for how much you can borrow and how quickly you need to pay back. Already in May it may come new rules.

On Friday 6 March, a Treasury Siv Jensen out an order to FSA. The assignment was to come up with a list of measures to curb housing prices.

Monday was a ready answer, and in the letter FSA proposes a regulation that is based on the agency’s guidelines for mortgage.

Finance Jensen (FRP) now sends proposals for consultation with 6-week deadline. This means that already in May can get a lånetak.

– It is important to get specific professional advice on how risk in the household sector can be muted. We will send proposals for consultation and carefully go through them in the light of the consultation notes, says Jensen said in a statement on Tuesday.

– We are now working with several ministries to look at a broader set measures to contribute to a more stable situation in the housing market. Measures on both the supply and the demand side is concerned, says Jensen.

FSA avoids adroit to propose tightening equity requirement as the four non-socialist parties would lower before the election in their proposals for action against mortgage growth.

But the practice of equity requirement, which is actually a requirement of maximum leverage, being tightened and other requirements for borrowers become more stringent.

READ ALSO: Chief Economist fear new requirement for an equity housing

Want better market balance

Jensen says she wants a better balance in the housing market, but that she did not want to weaken the flexibility in the market.

– The growing debt growth is primarily a challenge for those who are most vulnerable and who will be affected if it happens sudden unexpected things. That’s where my attention is strongest. The aim is to implement measures to ensure more attention at once, says Jensen.

On the question of what is the main concern of the housing market right now responds Jensen following:

– Now we will avoid the build up a financial imbalance. Debt developments in Norwegian households is large, while the housing market is very hot. We want a better balance between supply and demand, and will implement several measures. Now these proposals for consultation first, and we will assess Financial Supervisory professional advice by different players, says Jensen.

Tightening

The proposals that it becomes difficult to take big loans.

– Despite some objections, the FSA concluded that it is most appropriate to establish a requirement demands lending practices. A regulation fixing is necessary to remove or severely restrict banks’ room to waive standards of lending practices, writes FSA said in a statement

WILL BRAKE MORTGAGES RISE: Financial Supervision Director Morten Baltzersen have Monday sent its proposals to measures to curb household debt growth.

Photo: Terje Bendiksby , NTB scanpix

Here are the main proposals from the FSA:

** requirement where large rate increase one borrower must bear getting loans, increased from five to six percentage points. For fixed rate loans must borrower could withstand a corresponding increase in interest rates after the end of the fixed rate period.

** It introduced a requirement of at least 2.5 percent annual installment payment from the first year for all installment loans with a LTV over 65 percent.

** For credit lines becomes equity requirements sharpened by the maximum LTV is reduced from 70 to 65 percent.

** Maximum LTV retained 85 percent, including any additional collateral. Authority proposes that it should not be opened for a particular justifiability assessment may justify higher LTV.

** rule which juxtaposes personal security from third party (bail) is not included in the new regulations.

Harder to make exceptions

“The proposed regulation entails a clear narrowing of the judgment in banks and will be the most important contribution to tighter lending practices. A regulation fixing something, but clearly delimited, flexibility will still be able to provide a tighter lending practices than the current guidelines in practice means, “said the press release from the FSA.

The tightening of requirements means that it becomes more difficult for banks to grant exemptions from the requirements on maximum LTV by mortgages.

ALSO READ: Called the bank – saving thousands in lower interest rates

Authority opens that if the Ministry wants to retain the current flexibility that gives banks the opportunity to bypass the requirement, they should be accompanied by a requirement that limits the number loans a bank can provide beyond the requirements.

“This frame can example set at 5 percent of all installment loans granted during a quarter. This type of regulation is called “speed limits” in countries that have such limits. Use of the “speed limit” provides anything but controlled flexibility. At the same time such a facility involve a more complex regulation, with increased reporting and control requirements, “said the press release.

Brakes not house prices

There is a shortage of affordable housing in pressure areas is the problem, not for easy access to mortgages, believes Finance Norway.

To check YOUNG: CEO Idar Kreutzer Finance Norway believes young people will have greater difficulty to get into the housing market to the proposal.

CEO Idar Kreutzer Finance Norway believes it is young graduates people with good job opportunities and ensure future revenues that will primarily highlight the effect of the measures FSA proposes.

– Without high equity, or the possibility of collateral parents’ property, they will with this proposal have greater difficulty getting into in the housing market. That audit removes the option to look at future income and no longer will accept guarantors as collateral will be marked very well for them, says Kreutzer in a statement.

ALSO READ: More young people saving for housing.

Leader Heidi Fuglesang in Conservative Students fear the proposals will affect students in the establishment phase.

– Already today there are strict equity requirements for mortgage and many in the establishment phase struggling to get into the housing market and are forced out of the rental market. This contributes partly to make it more profitable and rental property. The proposals put forward today will sharpen the banks ability to provide loans based on discretion and stricter capital requirements, thereby making the threshold to get into the housing market higher. For young people, there will be virtually hopeless, says Fuglesang.

Current effect

Association of Real writes in a press release that they believe action on the credit side will have limited short-term effect:

– The housing market is characterized by an imbalance between supply and demand. There are over time built few homes to feed the growing demand. Lending rates are very low, and it is created the expectation that interest rates will down even lower levels.

If Norges Bank lowers key interest rate further this week fearing Association of Real Estate that it stimulates new borrowing in a scope will override the effect of other measures:

– There are too few homes on the market, and still plenty of creditworthy buyers who are willing to pay well for their dream homes. Then price pressures persist and the risk of financial imbalance increases, says CEO of Norwegian Real Estate Agents Carl O. Geving.