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MS Leader: Muddying the MMR waters

There’s been much cause for complaint in the Mortgage Market Review over the last three years, but one of the few bright spots has been its attitude to non-advised sales.

Brokers have long complained that consumers often believe that the sales pitch they’ve received at a lender’s branch is advice.

The MMR’s demand that all customers receive advice was welcomed by brokers – the value of advice was finally recognised. But lenders, fearing a massive bill as they train staff to be able to give advice, are understandably less keen.

With three weeks to go before responses to the consultation are due in on March 30, lenders are cranking up their lobbying to get around costly new rules by suggesting the addition of a transaction category to ensure qualified and expensive staff aren’t needed for any changes made to a loan.

Association of Mortgage Intermediaries director Robert Sinclair explains what this could mean for brokers on page 29. The MMR looks set to clarify the difference between advised and non-advised sales but if lenders muddy the waters once more consumers could remain confused about what they’ve received.

Meanwhile, with Clydesdale and Yorkshire banks following Bank of Ireland, Halifax and a raft of others with SVR hikes, this could be open season for borrowers looking to remortgage.

Times are tough, although one of our letter writers this week makes the point that when borrowers took out their existing mortgage, they should have been stress-tested to a higher rate.

The UK marked its third anniversary last week of a 0.5% interest rate, but higher rates will inevitably return eventually. And the current SVR increases will finally reveal the true cost of our mania for property.

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