View more on these topics

FCA should consider ‘modest de-regulation’ to promote competition

FCA logo new 3 620x430

The FCA should consider a “modest de-regulation” of the mortgage market to improve competition, says the Council of Mortgage Lenders.

At the end of last year, the FCA published calls for input on competition in the sector and is now deciding whether to launch a full review on the issue.

The FCA is interested in issues such as whether all areas of the mortgage market are competitive and how competition is affected by economic changes such as an interest rate rise.

The regulator acknowledges the case for examining how regulation has affected competition. Specifically the FCA is asking how the Mortgage Market Review affected competition.

But it is also considering the competition angle to its current review of responsible lending, as well as its completed review into mortgage advice and distribution.

The CML argues that the mortgage market is already competitive but urged the regulator to avoid layering on more regulation to increase competition further.

In its latest News & Views publication, the trade body says: “We would argue that to promote greater competition in the future, the mortgage market would now benefit for a period of stability, without any significant regulatory intervention for a while.

“Indeed, there might be a case for modest de-regulation in some areas – or at least clarification of the rules by the FCA – to encourage more competition in the market. We believe that the regulator could provide greater clarity where firms may feel that they are taking a risk if they opt for a liberal interpretation of the rules.

“In particular, it might be helpful for the FCA to make clear that it will not take an unnecessarily severe approach – either now or retrospectively – with firms over the interpretation of rules for assessing affordability for borrowers whose mortgages extend into retirement.

“The same could apply to rules covering mortgage sales and advice, which currently appear to discourage some firms from dealing with online and digital applications from customers. If that is indeed what is happening, it is at odds with what the FCA has said about encouraging mortgage market innovation and the use of modern channels of communication.”

The FCA will publish its feedback on the calls for input in March, as well as the details of any competition review.



Santander cuts max LTI on loans over 80% LTV

Santander has cut its maximum loan-to-income cap on residential loans of more than 80 per cent LTV. The lender yesterday sent a note to brokers saying that the new rate would be 4.45 times income for these cases. The previous rate was 5 times for customers borrowing between 80 and 90 per cent LTV. First […]

Nationwide to cut 95% range by up to 40bps

Nationwide will cut rates on its 95 per cent LTV fixed rate mortgages by up to 40 basis points from tomorrow. Rates for the lender’s two-year fixes will be cut by 35 basis points. From tomorrow it will offer a 3.89 per cent product with a £999 fee and a 4.29 per cent product with no […]

Ian Andrew 700x450

Nationwide sets out MCD changes

Nationwide has outlined how it will comply with the new rules introduced by the Mortgage Credit Directive. The society has confirmed it will use an updated KFI document, known as the KFI+, rather than the European Standardised Information Sheet. As the MCD requires lenders to provide the customer with a binding offer and a reflection […]


B2L experts: ‘Landlords must act now to avoid stamp duty hike’

Landlords have just a few weeks to submit their limited company applications or risk being stung with whopping stamp duty bills in April, say experts. In November’s Autumn Statement, Chancellor George Osborne revealed stamp duty rates for landlords would be 3 percentage points higher than residential purchases from 1 April. On a property worth £275,000, […]


DB transfer showstoppers

By Jim Grant, Senior Product Insight & Technical Support Analyst Transfers from defined benefit (DB) schemes are a bit of a hot topic just now. In this article we look at a couple of factors that could prevent a transfer from happening Equalisation of pensions Prior to the Barber case in 1990, DB pension schemes typically provided […]


News and expert analysis straight to your inbox

Sign up
  • Post a comment
  • Ben Gosling 14th January 2016 at 1:04 pm

    Further clarification around the definition of consumer buy to let would also be welcome, particularly where it relates to mixed-use properties. Article 4 of the Mortgage Credit Directive Order 2015, which states that a BTL loan cannot relate to a property that is at any time occupied by the borrower or a related person, is somewhat contradicted by Schedule 1, which amends the definition of a regulated mortgage contract as set out in the Regulated Activities Order 2001 but leaves the established 40% threshold in place.