We are all familiar with the commonly used expressions ‘To err is human’ and ‘You live and learn’, but all too often we fail to learn from our mistakes and repeat them, over and over again.
Heck, on a global scale we’ve headed down the same paths that have previously led to disaster, without even a glance behind; recent political decisions are proof of this.
In the mortgage sector, we have regulators in place whose job it is to make sure the industry learns from its mistakes and takes an enlightened approach in future, so as not to harm consumers or the market. What with the FCA, the PRA and the FPC weighing in on business, some may say there are too many captains at the helm of the regulatory ship. But without them it would sink.
It’s certainly true that the buy-to-let market has been singled out for a crackdown from all angles in the past two years, but the PRA’s efforts to introduce stricter affordability measures in the sector are only for the good of the market.
Lenders shouldn’t be condemned for introducing tighter interest coverage ratios and stricter BTL affordability tests ahead of the underwriting standards due to be applied from January. They would be wrong not to, and by doing so are acting responsibly.
Competition in the market has to be a good thing and it would be detrimental to all if lenders began to shy away from offering BTL products as they did following the crash.
On the other hand, lenders should be taken to task for attempting to lure consumers away from advice (see Product transfer sales tactics ‘break MMR rules’).
One of the fundamental messages from 2014’s Mortgage Market Review was that mortgage customers should be encouraged to seek independent advice for their own good, so it is somewhat shocking to find that lenders aren’t playing ball when it comes to product transfer customers.
Broker advice can only be of benefit to consumers, and it should always
Finally, a heads-up that next week’s edition of Mortgage Strategy is the last one of the year, so now is the time to fill us in on any urgent news!