The industry body representing the part of the mortgage industry which markets its loans through intermediaries warned at the weekend that the Financial Services Authority’s Mortgage Market Review (MMR) still contains “some areas of contention” regarding how best to regulate the sector.
The Intermediary Mortgage Lenders Association (IMLA) acknowledged that the MMR had made a good fist of trying to address the concerns of the mortgage industry over the review – namely that too tight controls would jeopardise the flexibility and competitive nature of the UK mortgage market – it said that the MMR still needs to consider the impact of any reforms on the availability and cost of mortgages generally.
IMLA executive director Peter Williams said: “It is clear that the MMR has come a long way from when the first discussion paper was released in 2009 but there still remain some areas of contention, especially around interest-only routes and details of affordability.”
“IMLA’s assessment is that the direction of policy, which appears to prioritise consumer protection over consumer choice, along with more demanding prudential regulation for financial institutions, will limit mortgage supply and mortgages that are available will be more expensive.”
Mr Williams warned that such a situation combined with the current economic circumstances facing the UK could only serve to act “as a cap on the ambitions of would-be homebuyers,” and warned that tighter restrictions on mortgage lending would exacerbate a situation in which a higher proportion of “twenty-somethings” finds itself unable to access a mortgage than since the end of WWII.
“It is thus imperative at this stage that there is alignment between the FSA and the Government and a full recognition of the likely impacts and consequences,” he insisted.