View more on these topics

FSA makes sense on interest-only


With the end of the year almost upon us, there has now been enough time to digest the FSA’s latest Mortgage Market Review guidance and the publication was mercifully free of any last-minute curveballs.

The regulator has taken a common-sense approach to many of the issues currently blighting the industry and shown a willingness to tackle underlying problems such as the interest-only conundrum.

Its clarification on the last point was particularly welcome and probably necessary in a ‘compensation culture’ society where borrowers often fail to take enough responsibility.

The FSA has re-emphasised the fact that the repayment responsibility lies with the borrower and this reduces the unfair expectancy that lenders should somehow be able to predict the future. It is also encouraging to hear the regulator intends to publish a thematic review early next year concerning existing interest-only borrowers who are unable to repay the capital element of their interest-only loan.

There have been calls from some quarters to abolish the products altogether, but reducing product choice even further at the minute is not the right course of action and the FSA’s sensible call is correct. The regulator’s redefined position on allowing high net-worth borrowers to opt out of advice is also a belated recognition of the different circumstances such individuals face and is a constructive example of the FSA taking on board market feedback.

At the end of the day, much of the emphasis of the MMR is about delivering a mortgage market that works better for consumers and is sustainable for its participants and taking a common-sense approach to such matters gives us a more realistic hope of achieving this.



Virgin Money eyes stock market float

Virgin Money is reportedly eyeing a potential stock market flotation after leading shareholder and American investor Wilbur Ross acquired a 38 per cent stake in acquisition vehicle NBNK.


Mutuals beating banks for mortgage lending

Mutuals are not only lending more, offering better rates and have better public standing than banks, but they are supporting first time buyers in a way their rivals are not and driving vital improvements in the housing market as a result.

Letters to editor MS 480

Letters to the editor

Star Letter It’s that time of year when everyone starts to look ahead to the New Year and think about how they’d change their strategy for greater success in the year ahead. We’ve already created our plan for 2013, what we need to carry on doing, what areas we need to place more focus and […]


News and expert analysis straight to your inbox

Sign up