The FCA has proposed changes to how lenders assess the affordability of a loan.
This follows the final report of its Mortgages Market Study in which the consultation on new lending rules formed part of a package of remedies designed to help the market work better.
The remedies package includes:
- seeking to speed up more widespread participation by lenders in innovative tools to help customers understand what mortgages they qualify for
- a proposal for the Single Financial Guidance Body (SFGB) to extend its existing retirement adviser directory to include mortgage intermediaries
- consulting on proposals to change mortgage advice rules and guidance to help remove potential barriers to innovation
- understanding more about the customers that do not switch their mortgage
Gemma Harle, managing director of the Intrinsic mortgage network (part of Quilter), said: “For most people, a mortgage will be the largest debt they take on in their life and it is reassuring that the Mortgage Market Study, released today (26th March), recognises that the mortgage market works well for most and is drastically different to pre-financial crash times.
“Alongside addressing the growing problem of mortgage prisoners, one of the main themes of today’s paper is supporting consumers to have more access to information surrounding mortgages, which is certainly a good thing.
“However, these tools will require the full engagement of the industry and may still be a long way from inception.”
Gemma added that despite the report highlighting key issues in the market, it used data submitted by lenders and intermediaries from “four years ago”, and was not likely to provide “an accurate snapshot of the mortgage market today”.
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