View more on these topics

Just 6% of FTBs understand mortgages, says MCCB

Only 6% of first-time buyers have a good understanding of mortgages, research from the Mortgage Code Compliance Board has revealed.

With just a year before the FSA takes over the regulation of mortgages, the MCCB says the research highlights the importance of high quality mortgage advice to consumers.

Conducted from a sample of FTBs, it looked specifically at those taking out a mortgage to move house and those looking to remortgage without moving.

When asked, only 6% of FTBs said they had a good understanding of mortgages, and nearly half only some understanding, with the rest saying they “didn&#39t know much at all.”

Significantly, the survey results showed that some customers were confused about the level of service they had received, whether advice or merely information, with some customers thinking that they had been given advice on products within an information-only sale. This is contrary to Mortgage Code guidelines.

The MCCB says it is considering these results carefully and will discuss its responses and findings with the FSA.

In particular, the MCCB says it is concerned that the FSA&#39s proposals for the use of &#39scripted questions&#39 in non-advised sales could blur even further the boundaries between the different levels of service provided by a firm and lead some customers to believe they had received a form of advice or recommendation.

Luke March, chief executive of the MCCB, says: “As the mortgage market in the UK is worth around £250bn per annum and more than two million mortgages are taken out every year, it is important that there is complete clarity when mortgage advice has been provided, especially to meet the needs of first-time buyers.

“This data was collected to build on the information obtained via the compliance monitoring visits of our MCCB inspectors, and we have identified areas of high consumer satisfaction, along with areas where we will work with intermediaries and lenders to improve.”

In general, however, many borrowers said that they were satisfied with the service they had received from their mortgage lender or mortgage intermediary.

As many as 95% of respondents felt that the mortgage salesperson did a good job of finding a mortgage that suited their needs, with 93% stating that they understood the reasons why a particular product was recommended.

Recommended

FSA gets into shape for 2004

The FSA is undergoing a major internal reorganisation as it prepares to go live with its regulatory proposals. Regulation of the mortgage and general insurance industries are just two areas under the regulator&#39s microscope and chief executive John Tiner is heading a management reshuffle as the body moves from policy development to policy implementation. The […]

MGM unveils compliance service for ARs

MGM Assurance has launched MGM Home Finance for brokers seeking appointed representative status. The network will be free to intermediaries who pass seven or more applications through one of its four packaging partners, or £50 per month to those who submit less. MGM will use Optima Mortgage Solutions and Mortgage Intelligence&#39s lender panels for prime […]

75,000 mortgages advanced in first half of 2003

A staggering 75,000 mortgages worth £7.7bn were advanced in the first half of 2003 research by www.buy-to-let-secrets.co.uk reveals. However, the website says that while the figures are testament to the fact that property for time-being is a sound investment, it warns those that have been using for a quick fix could come unstuck. Property investment […]

Halifax increases SVR by 0.25%

Halifax says it will be increasing its standard variable rate from 5.50% to 5.75%, following the Bank of England&#39s rate rise last week. The increase will come into effect from the December 1 2003 for existing borrowers, with tracker mortgage customers also seeing an increase in rates from the same date.

Thumbnail

Neptune video: Abenomics: the impetus for Japan’s fast-track recovery?

The remarkable performance of the TOPIX over the past year has caused many sceptical equity investors to look again at the Japanese market. These returns have come despite very significant problems facing the Japanese economy. Chris Taylor, manager of the Neptune Japan Opportunities Fund, discusses these problems and whether Abenomics will be able to overcome them, enabling the market to continue to rise.

In the video, Taylor addresses the following:

• The size and speed of Japan’s unprecedented monetary policy
• Abenomics and the implications should it fail
• Corporate Japan and beneficiaries of government policy

Newsletter

News and expert analysis straight to your inbox

Sign up