While regulation is crucial to a healthy and controlled mortgage market, there is definitely such a thing as over-regulation.
In recent years, the Mortgage Market Review created a huge shift in how home loans were sold, and which the industry paid for, literally. Then there was the Mortgage Credit Directive, which added further rules for the industry under EU regulation, and both pieces of legislation had seismic impacts on the mortgage world.
And of course next up for the industry to digest is the outcome of the FCA’s study on competition in the sector, which it is currently working on, although the regulatory body is currently in purdah before the general election so updates aren’t expected on that imminently.
It sometimes seems that rules are enforced only to be adjusted, or completely changed, a short-time later with another policy or review, which can lead to a stressful environment as the industry struggles to keep up and confusion grows for customers with never-ending criteria changes for borrowing.
Firms in the industry must struggle to keep apace with the endless legislation imposed on them. But what of rules coming in from the EU with deadlines applied for just before Brexit is completed? In this week’s splash, concerns are raised around the impact of the EU’s General Data Protection Regulation, which comes into effect from May 2018.
To comply with the rules there will be several processes to go through, which are a drain on time and resources for firms. And we can only speculate as to whether these rules will still apply once the UK has completed its exit from the European Union.
In my humble opinion, it seems that a grace period for complying with such EU rules should be offered, given the UK’s imminent departure, and while the UK Government gets it finger out and draws up a plan for how such regulation will look post-departure.
I know, it’s not that simple, but surely businesses shouldn’t be suffering unnecessarily while plans are formulated.
In other news this week, buy-to-let lenders continued to drop rates in their droves, while HSBC introduced a market-leading five-year fix. It’s good to see competition in the market for the benefit of borrowers, surely that’s something regulators can agree on.