The BSA highlights the disproportionate impact of Basel 3.1 on UK monoline mortgage lenders such as building societies. While building societies are well capitalised and can absorb these changes, any increases need to be based on empirical evidence of increased risk. For example we highlight self-build and holiday lets where the data does not support the PRA’s proposed increased capital requirements for these products. We also highlight the importance of the smooth functioning of the housing market by aligning to market norms such as the use of automated valuation models (AVMs).

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