Lenders and regulators work together for the greater good.
There are a number of sectors within the mortgage market, with numerous layers of provider offerings and multiple distribution channels. Competition is an inevitable – and vital – component within any successful business arena but equally important is customer welfare.
There are actually very few secrets within the lending community. Despite it being arguably more complex than ever, product offerings carry greater levels of transparency and stringent regulatory factors dictate boundaries.
Of course, lending institutions operate as individual businesses. Each have their own models, areas of specialism and objectives. However, there are certain scenarios when it is prudent for lenders to band together for the greater good.
Following the FCA’s Mortgage Market Study interim report, 59 authorised lenders – representing 93 per cent of the UK’s residential mortgage market – have agreed on a set of common standards to help borrowers stuck on standard variable rates but unable to switch products due to the implementation of stricter affordability criteria.
This is the result of a cross-industry voluntary commitment between UK Finance, the Building Societies Association and the Intermediary Mortgage Lenders Association. Such a move represents all that is good within the industry.
The FCA report did highlight just how well the mortgage market continues to work for the majority of borrowers – a positive in its own right. However, this coming together of the lending community to support disadvantaged borrowers underlines how a unified approach, when combined with strong lines of communication between intermediaries, lenders, trade bodies and the regulator, can result in sensible measures being implemented to further strengthen this commitment.
There is still plenty of work to be done in addressing the needs of a variety of borrowers in the current lending environment but if all cogs in the lending and regulatory wheel continue to work in a more cohesive way then better solutions, greater clarity and increased confidence will be found to support all.
Craig Calder is director of intermediaries at Barclays Mortgages