The BSA welcomes the PRA and FCA's consultation on high loan to income (LTI) lending. We support the proposals to move to a 15% aggregate flow limit, to retain the flexibility introduced last year and encourage greater utilisation of high LTI lending capacity. This is an important step forward and we support the direction of travel. 

However, we do not believe this is where the PRA and FCA should conclude their review of high LTI lending. 

We encourage the PRA and FCA to: 

1. Treat the current proposals as an interim measure only. We encourage the regulators to commit to a full review of the high LTI regime. 
2. Retain a rolling four-quarter measurement period, rather than moving to a fixed quarterly approach. A four-quarter rolling basis has been in place since 2017, supporting lenders to manage pipelines effectively and this accounts for short-term fluctuations in lending activity. We support the continuation of this approach. 
3. Recalibrate the regime to ensure it reflect today’s market realities, sophisticated lending practices and advanced prudential landscape. This means maintaining a proportionate, risk-based approach, while considering whether a 15% limit at ≥4.5x LTI continues to be the appropriate proportion and threshold. 

We welcome continued engagement with the PRA and FCA, to ensure lenders can productively engage with the wider regulatory objectives to support creditworthy and underserved consumers into homeownership. 

Download and read the full response here.