1. See Turner, Lord The Turner Review: A Regulatory Response to the Global Banking Crisis (London: Financial Services Authority, 2009),Google Scholaravailable at http://fsa.gov.uk/pubs/other/turner_review.pdf.

2. See FSA Mortgage Market Review (London: Financial Services Authority, 2009),Google Scholaravailable at http://www.fsa.gov.uk/pubs/discussion/dp09_03.pdf.

3. OFT Second Charge Lending – OFT Guidance for Lenders and Brokers (OFT 1105, 2009), available at http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft1105.pdf.

4. OFT Irresponsible Lending – OFT Guidance for Creditors (OFT 1107, 2010), available at http://www.oft.gov.uk/shared_oft/business_leaflets/general/oft1107.pdf.

5. Department of Business Enterprises and Regulatory Reform Better Deal for Consumers (CM7669, 2009), available at http://www.berr.gov.uk/files/file52072.pdf.

6. HM Treasury Reforming Financial Markets (CM7667, 2009), available at http://www.hm-treasury.gov.uk/d/reforming_financial_markets080709.pdf. A summary of responses was issued in November 2009, available at http://www.hm-treasury.gov.uk/d/rfm_responses.pdf.

7. The consultation has closed and there was a public hearing in September 2009; see the website available at http://ec.europa.eu/internal_market/finservices-retail/credit/responsible_lending_en.htm. The Commission's Consultation on the integration of EU mortgage credit markets issued in 2007 has been overtaken by events, although follow-up proposals are expected sometime in 2010.

8. 2008/48/EC, [2008] OJ L133/66.

9. Department of Business Enterprises and Regulatory Reform Consultation on Proposals for Implementing the Consumer Credit Directive (London: Department of Business Enterprises and Regulatory Reform, 2009),Google Scholaravailable at http://berr.gov.uk/files/file50962/pdf.

10. Department of Business Innovation and Skills Consultation on Proposals for Implementing the Consumer Credit Directive Government Response (London: Department of Business Innovation and Skills, 2009),Google Scholaravailable at http://www.bis.gov.uk/assets/biscore/corporate/docs/c/consumer-credit-directive-consultation-response.pdf.

11. See the website available at http://www.berr.gov.uk/files/file52326.doc.

12. Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, SI 2001/544, art 61 (as amended).

13. The FSA also regulates Home Purchase Plans, ie financing devices that comply with Islamic law, and Home Revision Plans, commonly known as equity release schemes. There are also plans in place to bring Sale and Leaseback Schemes under FSA regulation. There is thus a clustering of financing devices over the home under the FSA umbrella.

14. See, for instance, M Oldham ‘Mortgages’ in Tee, L (ed) Land Law: Issues, Debates, Policy (Cullompton: Willan, 2002) p 207 Google Scholar; E Lomnicka ‘The reform of consumer credit in the UK’[2004] JBL 129; S Nield ‘Borrowers as consumers: new notions of unconscionability for domestic borrowers’ in Kenny, M, Deveney, J and Mahony-Fox, L (eds) Unconscionability in European Private Financial Transactions (Cambridge: Cambridge University Press, forthcoming).CrossRefGoogle Scholar

15. See Council of Mortgage Lenders Response to HM Treasury Consultation Paper Reforming Financial Markets (2009), available at http://www.cml.org.uk/cml/policy/responses.

16. The FSA's duties include both maintaining confidence in the financial markets and the protection of consumers; see ss 2, 3 and 5 of the FSMA.

17. See Citizens Advice Set Up to Fail: CAB Clients' Experience and Secured Loan Arrears Problems (2007), available at http://www.citizensadvice.org.uk.

18. See ch 9. The FSA Review also advocates regulating previously unregulated buy-to-let mortgages and the sale of a lender's mortgage books.

19. HM Treasury Mortgage Regulation: A Consultation (2009), available at http://www.hm-treasury.gov.uk/d/consult_mortgage_regulation.pdf. The government announced in its 2010 Budget that it intends to transfer regulation of second mortgages to the FSA.

20. European Commission, above n 7.

21. See, for instance, the CML's Response to EU Commission White Paper on Integration of Mortgage Credit Markets (2008), available at http://www.cml.org.uk/cml/policy/responses.

22. Above nn 9–12.

23. See Advice, Citizens Briefing for the Treasury Select Committee Inquiry on Mortgage and Secured Loan Arrears (London: Citizen Advice, 2009)Google Scholar and Department of Business Innovation and Skills, above n 5.

24. Lomnicka, above n 15, and HM Treasury, above n 7, para 8.41. The Hampton Review in recommending wider regulatory reform had explored the consolidation of consumer protection within a single regulatory body; see HM Treasury Reforming Administrative Burden: Effective Inspection and Enforcement (2005), available at http://www.berr.gov.uk/files/file22988.pdf.

25. Lomnicka, above n 14 and Nield, above n 14.

26. Sections 25 and 29.

27. Sections 31–33 and 33A–E.

28. Sections 25, 25A and 26.

29. Citizens Advice, above n 17.

30. OFT Consumer Credit Licensing:General Guidance for Licensees and Applicants on Fitness and Requirements (OFT 969, 2008), available at http://www.oft.gov.uk/shared_oft/business_leaflets/credit_licences/oft969.pdf. The OFT has announced that they will take into account any breach of the FSA rules and principles, in particular irresponsible lending, when making licensing decisions or taking enforcement action.

31. OFT, above n 3.

32. OFT, above n 4.

33. Section 127.

34. See ss 135 and 136. A lender may only exercise their power to take possession by order of the court (s 126) when the court may give the mortgagor time to remedy a breach of the mortgage, including time to clear arrears by way of a time order (s 129).

35. CCA, ss 140A(5) and 16(6C). See S Brown ‘The unfair relationship test, consumer credit transactions and the long arm of the law’[2009] LMCLQ 90.

36. OFT Unfair Contract Terms Guidance (OFT 854, 2008), available at http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft311.pdf.

37. Professor Goode has criticized ss 140A–D as providing just too wide a discretion to be of much utility, see his evidence to House of Lords on proposed Consumer Credit Harmonisation Directive (2005), available at http://www.publications.parliament.uk/pa/ld200506/ldselect/ldeucom/37/37we07.htm, at para 22.

38. See, for instance, Maple Leaf Macro Volatility Master Fund v Rouvroy[2009] EWHC 257 (Comm), [2009] 2 All ER (Comm) 287, Khodari v Tamini[2009] EWCA Civ 1109, Patel v Patel[2009] EWHC 3264, MBNA Europe Bank Ltd v Thorius (unreported) 21 September 2009, South Shield CC and Nine Regions (t/a Logbook Loans) v Sadeer 14 November 2008, Bromley CC, available Lexis 8QT25415 (transcript). Only the latter alleged an irresponsible lending decision, which the court surprisingly rejected.

39. FSMA, s 71.

40. FSA Treating Customers Fairly Progress and Next Steps (FSA, 2004), available at http://www.fsa.gov.uk/pubs/other/tcf_27072004.pdf and the press release available at http://www.fsa.gov.uk/Pages/Doing/Regulated/tcf/index.shtml.

41. FSMA, s 64(8).

42. FSMA, s 229. There has been a report of a mortgagor recovering compensation for the sale of an ‘unsuitable’ mortgage; see the website available at http://www.guardian.co.uk/money/2009/mar/22/repossessions-mortgages.

43. Unfair Terms in Consumer Contracts Regulations 1999, SI 1999/2083.

44. Consumer Protection from Unfair Trading Regulations 2008, SI 2008/1277.

45. Citizens Advice highlighted these distinctions in their briefing for the Treasury Select Committee Inquiry on Mortgage and Secured Loan Arrears (2009), available at http://www.citizensadvice.org.uk/citizens_advice_briefing_for_the_treasury_select_committee_inquiry_on_mortgage_and_secured_loan_arrears__june_2009.

46. CCA, ss 137–140. See, for instance, Ketley v Scott[1980] CCLR 37, Davies v Direct Loans[1986] 1 WLR 823, Wills v Wood (1984) 81 LSG 1211, Paragon Finance plc v Nash[2002] 1 WLR 685, Broadwick Financial Services Ltd v Spencer[2002] EWCA Civ 35, [2002] 1 All ER (Comm) 446, London North Securities Ltd v Meadows[2005] 1 P&CR DG16.

47. FSA Handbook, MCOB 5 (Pre-application Disclosure), MCOB 6 (Disclosure at Offer Stage), MCOB 7 (Disclosure at the Start and of Contract and After Sale).

48. FSA Review, above n 2, para 6.1.

49. Similar findings are evident in other jurisdictions; see, for instance, in Australia, P O'Shea ‘Consumer credit disclosure does it work?’ (2008) 16 Journal of Banking and Finance Law and Practice 5 and, in the USA, E Renuart and D Thompson ‘The truth, the whole truth and nothing but the truth’ (2008) 25 Yale Journal of Regulation 181 and S Block-Lieb et al ‘Disclosure as an imperfect means for addressing overindebtedness: an empirical assessment of comparative approaches’ in Niemi, J, Ramsay, I and Whitford, W (eds) Consumer Credit, Debt and Bankruptcy (Oxford: Hart, 2009)Google Scholarch 8.

50. FSA Mortgage Effectiveness Review: Stage 1 Report (2006), available at http://www.fsa.gov.uk/pubs/other/mortgage_review.pdf; FSA Mortgage Effectiveness Review: Stage 2 Report (2008), available at http://www.fsa.gov.uk/pubs/other/MER2_report.pdf; FSA Mortgage Effectiveness Review: Sub-Prime and Lifetime Findings (2009), available at http://www.fsa.gov.uk/pubs/other/MER2_Illuminas.pdf and Citizens Advice Bureau, above n 17.

51. Illuminas Disclosure in the Prime Mortgage Market (2008), available at http://www.fsa.gov.uk/pubs/consumer-research/crpr81.pdf.

52. See generally Ramsay, I Consumer Law and Policy (Oxford: Hart, 2nd edn, 2007) pp 71–76 Google Scholar. The FSA commissioned research on the impact of behavioural economics by D De Meza, B Irlenbusch and D Reniers Financial Capability: A Behavioural Economic Perspective (2008), available at http://www.fsa.gov.uk/pubs/consumer-research/crpr69.pdf.

53. C Jolls Behavioral Law and Economics, available at http://www.law.yale.edu/documents/pdf/Jolls_Behavioral_Law_and_Economics.pdf.

54. FSA Review, above n 2, paras 6.7–6.11.

55. The strength and importance of individuals' conceptions of home have been explored by Fox, L in Conceptualising Home: Theories, Law and Policies (Oxford: Hart, 2007).Google Scholar

56. HM Treasury Government's Response to Kate Barker's Review of Housing Supply (2005), available at http://www.hm-treasury.gov.uk/d/prb05_barker_553.pdf.

57. Turner, above n 1, para 1.2.

58. See English Housing Survey, available at http://www.esds.ac.uk/Government/SEH/.

59. Office for National Statistics Sales and Transfers of Local Authority Dwellings: Social Trends 34 (London: ONS, 2004).Google Scholar

60. In 2008/9 the number of Right to Buy transactions fell to below 1000: FSA Review, above n 2, para 10.35. The Housing (Scotland) Bill 2010 proposes an end to a Right to Buy for new council house and housing association tenants.

61. See the website available at http://www.homebuy.co.uk.

62. Wallace, A Achieving Mobility in the Intermediate Housing Market: Moving Up and Moving On? (London: Chartered Institute of Housing/JRF, 2008) p 74 Google Scholar.

63. See Department for Communities and Local Government, Pomeroy Review of Prospects for Private Sector Equity: Summary Conclusions (2008), available at http://www.communities.gov.uk/documents/housing/pdf/pomeroyreviewconclusions.

64. See, for instance, National Housing and Planning Advice Unit (NHPAU) Affordability Still Matters (London: NHPAU, 2008)Google Scholar and Affordability – More Than Just a Housing Problem (London: NHPAU, 2009) and Wallace, A, Jones, A and Duffy, S Rapid Evidence Assessment of the Economic and Social Consequences of Worsening Housing Affordability (London: NHPAU, 2009).Google Scholar

65. L Whitehouse ‘The homeowner: citizen or consumer?’ in Bright, S and Dewar, J (eds) Land Law: Themes and Perspectives (Oxford: Oxford University Press, 1998)Google Scholar and ‘Impact of consumerism on the home owner’ in Cowan, D (ed) Housing Participation and Exclusion (Aldershot: Ashgate, 1998).Google Scholar

66. Fox, L Conceptualising Home: Theories, Law and Policies (Oxford: Hart, 2007)Google Scholar ch 5.

67. R Burrows and S Wilcox ‘Half the poor: homeowners with low incomes’ (2000) 7 Housing Finance 47. For more recent research, see above n 62.

68. Fox, above n 33, p 217. Fox highlights research which suggests that low income homeowners, in contrast to low income tenants, must bear increased maintenance and repair costs, suffer from lower economic mobility but increased financial vulnerability. See also Lyndhurst, B Social Mobility and Home-ownership: A Risk Assessment (London: Department for Communities and Local Government, 2007).Google Scholar

69. See Stephens, M et al (eds) Housing Market Recessions and Sustainable Home-Ownership (York: Joseph Rowntree Foundation, 2008)Google Scholar and Ford, J and Wallace, A Uncharted Territory? Managing Mortgage Arrears and Possessions (London: Shelter, 2009).Google Scholar

70. FSA Review, above n 2, paras 10.41–10.42.

71. Fox, above n 66, p 211.

72. See Burrows and Wilcox, above n 67.

73. Fox, above n 66, p 225.

74. Illuminas for FSA Mortgage Effectiveness Review Arrears Findings (2008), available at http://www.fsa.gov.uk/pubs/other/mer_report.pdf.

75. See, for instance, letter of 27 November 2009 issued to all chief executive officers of licensed lenders, available at http://www.fsa.gov.uk/pubs/ceo/arrears_repossessions.pdf. CML have also updated their industry guidance on handling arrears and repossession; see the website available at http://www.cml.org.uk/cml/policy/issues/1629.

76. Council for Civil Justice Pre-action Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in respect of Residential Property (2008), available at http://www.civiljustiuce.council.gov.uk/files/Mortgage_Pre-action_protocol21_Oct.pdf. See L Whitehouse ‘The Mortgage Arrears Pre-action Protocol: an opportunity missed’ (2009) 72 MLR 793.

77. M Haley ‘Mortgage default: possession, relief and judicial discretion’ (1997) 17 LS 483 and L McMurtry ‘Mortgage default and repossession: procedure and policy in the post-Norgan era’ (2007) 58 NILQR 194.

78. Ford and Wallace, above n 69, although Citizen Advice reports some continuing evidence of poor arrears collection practices particularly amongst sub-prime and second-charge lenders; see above n 45.

79. Social Security (Housing Costs Special Arrangements) (Amendment and Modification) Regulations 2008, SI 2008/3195. The regulations also increase to £200,000 the mortgage limit on which the benefit may be claimed.

80. By August 2009 it was reported that only six households had been assisted; see the website available at http://www.politics.co.uk/news/economy-and-finance/mortgage-rescue-scheme-helps-only-six-households-$1317276.htm.

81. Ford and Wallace, above n 69.

82. FSA Review, above n 2, para 6.12.

83. Cm 7669, above n 5; HM Treasury, above n 6.

84. Ford and Wallace, above n 69.

85. See, for instance, OFT Scoping Paper on Irresponsible Lending (OFT 1012con, 2008), available at http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft1012.pdf.

86. MCOB 11.3.1.

87. MCOB 11.3.4.

88. MCOB 11.3.5. Special guidance relates to interest-only mortgages and circumstances where payments are to be made from sources other than income; see MCOB 11.3.5 and 11.3.6.

89. MCOB 11.3.2.

90. In the first 6 months of 2009 there were 24,100 repossessions, 205,6000 mortgages were in arrears of 2.5% or more of the mortgage balance and over 270,4000 mortgages were in arrears by 3 months or more; see CML statistics, available at http://www.cml.org.uk/cml/statistics.

91. There has been a similar general reluctance to consider caps on interest rates; see Ramsay, I Consumer Law and Policy (Oxford: Hart, 2nd edn, 2007) pp 555–559.Google Scholar

92. Turner, above n 1, ch 3.

93. FSA Review, above n 2, ch 4. Their findings reveal that, although there is some evidence of a link between high LTV ratios and the risk of default, the average LTV ratios have been falling since 1997. They found no substantial evidence of a link between high LTI ratios and the risk of default.

94. The number of lenders offering such mortgages has since dropped dramatically – only two lenders were offering self-certified mortgages by August 2009 and the last lender announced their withdrawal in November 2009; see CML ‘Is it an end to self cert?’ (2009) News and Views Issue No 22.

95. FSA Review, above n 2, para 4.46.

96. Ibid, para 4.57.

97. Presentations at CML's Conference on the FSA's Mortgage Market Review (2009); see the website available at http://www.cml.org.uk/cml/events/highlights/event80.

98. See EU Consultation, above n 7, p 7.

99. C Peterson ‘The political economy of consumer credit securitization: comparing predatory lending in home finance in the US, UK, Germany and Japan’ in Niemi, J, Ramsay, I and Whitford, W (ed) Consumer Credit, Debt and Bankruptcy (Oxford: Hart, 2009)Google Scholar ch 2.

100. Turner, above n 1, para 1.2.

101. See also government promises to bring securitisation under control: Treasury, HM Pre-Budget Report (London: HM Treasury, 2009)Google Scholar para 3.12.

102. FSA Mortgage Effectiveness Review: Stage 1 Report, above n 50, and Mortgage Effectiveness Review: Stage 2 Report, above n 50.

103. See Ford, J et al Homeowners Risk and Safety-Nets: Mortgage Payment Protection Insurance (MPPI) and Beyond (London: Office of the Deputy Prime Minister, 2004).Google Scholar

104. Both the OFT and FSA have investigated payment protection insurance in 2005 and 2006. CML's report of these investigations summarises their findings; see the website available at http://www.cml.org.uk/cml/policy/issues1552. In October 2009, the FSA reached agreement with MPPI providers on a £60 million compensation package for mortgagors subject to unfair variation of their MPPI; see the website available at http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/135.shtml.

105. Centre for Housing Research, University of York Developing Safety Nets for Home-Owners (York: Joseph Rowntree Foundation, 2008).Google Scholar

106. See HM Treasury, above n 6, paras 8.48–8.50.

107. FSA Review, above n 2, paras 4.61–4.93, although it is unclear how the respective duties of lenders and intermediaries would be divided; see CML, above n 94.

108. Ibid. para 5.4.

109. There are concerns over the widespread use of credit references agencies; see Ramsay, I Consumer Law and Policy (Oxford: Hart, 2007) p 246 Google Scholar. In particular there is a lack of evidence that reliance on positive as well as negative information leads to lower levels of default; see A Padilla and M Pagano ‘Sharing default information as a borrower discipline device (2000) 44 European Economic Review 1951.

110. FSA Review, above n 2, para 4.79.

111. Earlier drafts of the CCD called upon lenders to assess the suitability of credit offered to individual consumers; see S Franken ‘The political economy of the EC Consumer Credit Directive’ in J Niemi et al, above n 49, ch 7.

112. BERR Consultation, above n 9, paras 5.1–5.12.

113. OFT Guidance, above n 4, ch 4.

114. Ibid.

115. FSA Review, above n 2, para 4.84

116. See the website available at http://www.cml.org.uk/cml/publications/newsandviews/36.

117. CML, above n 97. Evidence from the recession of the early 1990s supports this view; see Ford, J Problematic Home Ownership: The Management and Experience of Arrears and Possessions in Depressed Housing Market (York: Joseph Rowntree Foundation/Loughborough University, 1994).Google Scholar

118. FSA Review, above n 2, para 5.10.

119. MCOB 4.8. The information is carefully scripted to avoid giving advice.

120. MCOB 4.7.2.

121. MCOB 4.7.4.

122. MCOB 4.7.13–4.7.14.

123. MCOB 4.7.6.

124. FSA Review, above n 2, paras 5.9 and 5.55.

125. Only arrangements fees and pre-payment charges need to be disclosed in the Key Facts Illustration; see MCOB 5. MCOB 12 requires pre-payment charges and arrears charges to be a reasonable pre-estimate of the costs incurred by the lender and prohibits other excessive charges. Any charges, which are not core terms, fall within the Unfair Terms in Consumer Contract Regulations 1999, SI 1999/2083.

126. [2009] UKSC 6, [2009] 3 WLR 1215 at [79] per Lord Phillips.

127. Citizens Advice, above n 17.

128. FSA review, above n 2, ch 5. A similar call for secure tenants exercising a ‘right to buy’ to be given adequate explanation of the costs of home ownership is found in ss 121AA and 121B of the Housing Act 2004.

129. Above n 7.

130. See Article 5.6.

131. See Franken, above n 111. The UK government was amongst those rejecting the proposal; see Department of Trade and Industry Consultation on the Consumer Credit Directive (2005), available at http://www.berr.gov.uk/files/file14388.pdf.

132. BERR Consultation, above n 9, paras 4.1–4.17.

133. OFT Guidance, above n 3, ch 3.

134. FSA Review, above n 2, para 3.44.

135. For instance, Northern Rock, which had relied upon securitisation and the wholesale markets for its funding, and Bradford & Bingley, which also relied on the wholesale money markets for funding and was particularly exposed to the buy-to-let market.

136. These measures are described in HM Treasury, above n 6.

137. Turner, above n 1, para 2.7.

138. FSA Review, above n 2, ch 5.

139. SI 1999/2083.

140. SI 2008/1277.

141. Newham LBC v Khatun[2004] EWCA Civ 55, [2005] QB 37.

142. G Howells ‘Poor consumers in credit markets’ in Cartwright, P (ed) Consumer Protection in Financial Services (The Hague: Kluwer, 1999) p 257.Google Scholar

143. Section 16A.

144. Eg MCOB 4.10 and 5.8.

145. Eg MCOB 8 and 9.

146. As the House of Lords has acknowledged in trying to find a balance between the rights of lenders and mortgagors, sureties and occupiers; see, for instance, William & Glynns Bank v Boland[1981] AC 487, City of London Building Society v Flegg[1988] AC 54, Abbey National Building Society v Cann[1991] 1 AC 56, Barclays Bank v O'Brien[1994] 1 AC 180 and Royal Bank of Scotland v Etridge (No 2)[2002] 2 AC 773.

147. Above n 66, p 227.

148. Ibid, pp 88–96.

149. As suggested in Posner's Economic Analysis of Law (Boston, MA: Brown and Company, 1991) p 440.

150. Ministry of Justice Mortgages: Power of Sale and Residential Property Consultation Paper CP 55/09 (December 2009), available at http://www.justice.gov.uk/consultations/docs/mortgages-power-sale.pdf.

151. See, for instance, CML ‘The coming debate: lending, consumer choice, aspirations and risk’ News and Views (2008); Stephens et al, above n 69, and Ford and Wallace, above n 69.

152. R O'Connor ‘Mortgage demand at new heights’The Times 5 January 2010 relying on figures provided by the National Housing Federation.

153. HM Treasury, above n 56.

154. Housing starts and completions in 2008–2009 were down by 42% and 20%, respectively, on 2007–2008; see HM Treasury Investment in the Private Rental Sector (February 2010) para 1.8, available at http://www.hm-treasury.gov.uk/d/consult_investment_ukprivaterentedsector.pdf.

155. Ibid and Communities and Local Government The Private Rented Sector: Professionalism and Quality (2009), available at http://www.communities.gov.uk/documents/housing/pdf/1229922.pdf, responding to Rugg, J and Rhodes, D The Private Rented Sector: Its Contribution and Potential (York: University of York, 2008).Google Scholar

156. See, for instance, S Bright and N Hopkins ‘Low cost home ownership – the legal issue of the shared ownership lease’[2009] Conv 337.

157. Stephens, M, Daily, M and Wilcox, S Developing Safety Nets for Home-owners (York: Joseph Rowntree Foundation, 2008).Google Scholar

158. CML Response to the Financial Services Authority: Mortgage Market Review (CML 2009), available at http://www.cml.org.uk/cml/policy/responses.