After a busy first half of 2014, it seems apt to review our key policy topics for the year.
We anticipated the MMR would be our main regulatory priority and we have continued to talk to the FCA about the new regime on behalf of lenders. Four months on, implementation has gone well with minimal market disruption. The FCA’s various thematic reviews will create a big workload and we intend to play a major role addressing any unintended consequences.
Round two of regulatory change is the implementation of the European mortgage credit directive. We hope the impact will be modest but it is disappointing that the Treasury has decided to impose national law on part of the buy-to-let market despite previously believing voluntary mechanisms would be adequate. We await the FCA’s consultation on implementing the directive and will work to avoid any unintended impact on the market.
Elsewhere, the first phase of contacting interest-only customers was received positively by the regulator and data shows good industry progress. Help to Buy appears to have had its intended impact, with take-up mainly by those buying lower-priced homes, spread across the UK.
We revised our arrears forecasts downwards due to the continued commitment of borrowers, lenders and advisers to address individual payment problems as they arise. Our work with the Money Advice Service will assume a higher profile as we prepare for a rate rise.