Mortgage applications will now take longer when the FSA’s new proposals are implemented. The Financial Services Authority wants to require verification of a borrower’s income. This would end "fast tracking" of mortgage applications which is the practice of accepting the borrower’s word on income versus requiring proof of income.

The FSA sees this as a push to make sure borrowers can truly afford their loans. This will keep borrowers from getting into financial trouble and lenders from holding defaulted loans.

One casualty of this proposal will be the self-employed. Those without three years financial records showing their proof of income level would not be able to obtain a self-certification mortgage.

First-time buyers are expected to be in trouble as well. Young buyers tend to typically borrow from family and with a proof of income regulation it will be more difficult for them to borrow.

John Wriglesworth, a spokesman for New Castle Building said: "Independent industry estimates suggest that 80 per cent of first time-buyers are receiving help from the Bank of Mum and Dad. Whether it is generous gifts and loans from parents and grandparents or early inheritances, the majority of first time buyers lucky enough to own their first homes today are those who are receiving considerable financial help onto the first ring of the housing ladder."

Excluding first time buyers hurts the housing market since young buyers typically purchase homes of owners wishing to sell and upgrade to a larger property. This will leave homeowners without as many buyers in the market.

Since this type of economy usually sparks a need for entrepreneurial spirit, excluding a new self-employed person from lending for 2-3 years could keep someone from going self-employed or from being able to float their business through remortgage funds. Cutting a part of the work force that no doubt will be growing in numbers, that could be successful in a very short time and be able to afford a remortgage or mortgage would keep lenders from obtaining good borrowers into their business.

The only hope available for those negatively affected by the new FSA regulation is the fact that the industry will probably develop new products. The new proposal will take effect in 2011.