The Financial Services Authority (FSA) is to introduce sterner mortgage regulations which will see a home buyers ability to repay loans scrutinized in more depth. The rather liberal and feckless mortgage approvals has been blamed in part for fueling a housing boom – and now leaves many households trapped within a debt trap where a small change in income or outgoings could leave them facing foreclosure.
More can be read in this BBC article, but the tough new regulations means that borrowers must prove that not only is their income sufficient enough to repay the interest, but for interest only mortgages that they have a plan in place to repay the loan amount (over and above any house price rises).