FSA to set new mortgage lending rules

Mortgage applicants are to face tougher tests under proposals by the Financial Services Authority.

The City regulator hopes to bring in the measures in 2013 to try and prevent a repeat of the reckless lending that led to the financial crisis.

The Director General of the Council of Mortgage Lenders, Paul Smee, says the measure should not add significantly to the issues that the housing market is facing.