Mortgage Market Survey Proposals
The FCA have published the Mortgage Market Study final report confirming, in their opinion, that the market is working well in many respects, but there are also areas in which it falls short of the FCA’s vision.
To address these concerns, the FCA have developed a package of remedies aiming at:
Ø Seeking to speed up more widespread participation by lenders in innovative tools to more easily identify what mortgages customers qualify for
Ø A proposal for the Single Financial Guidance Body to extend its retirement adviser directory to include mortgage intermediaries to help customers make an informed choice of broker
Ø Consulting on proposals to change mortgage advice rules to help remove potential barriers to innovation
Ø Further analysis to understand more about those customers that do not switch mortgage to inform any necessary intervention
The FCA are also consulting on proposed changes to responsible lending rules to help consumers who cannot switch to a more affordable mortgage, despite being up to date with their mortgage payments.
The FCA proposals would allow lenders to conduct a modified affordability assessment if the customer meets certain criteria. In another change, mortgage lenders would be unable to enter into a new mortgage contract with an eligible consumer unless they demonstrate that the new mortgage is more affordable than their current one. Lenders would be allowed to use this assessment for consumers who are up to date with payments on their existing mortgage and want to switch to a more affordable mortgage without borrowing more.
The consultation closes on 26 June 2019 and can be accessed via this link:
https://www.fca.org.uk/publications/market-studies/mortgages-market-study
(Source: FCA)
