View more on these topics

Don’t blame MMR for low lending, says FSA

The Financial Services Authority has dismissed suggestions that the Mortgage Market Review is responsible for a drop in lending levels and a more risk-averse market.

Some industry commentators have previously criticised lenders for implementing parts of the MMR before the FSA has introduced its final rules, especially in interest-only lending, where lenders have significantly tightened criteria.

Gross lending has fallen from around £363bn in 2007 to around £140bn last year.

Speaking in a seminar at the Mortgage Business Expo in Manchester last week, Lynda Blackwell, manager of mortgage policy at the FSA, says the MMR is not to blame for this – it is a result of lenders struggling to obtain funding.

Blackwell told delegates: “Even though we have yet to publish final rules, we often read that it is the MMR that has caused lenders to curtail their lending and that it is the MMR that is causing lenders to be excessively cautious.

“It is all too easy to hide behind the MMR but the reality is that with funding so much thinner on the ground, lenders are, of course, going to use this to support high quality lending.”

On a more positive note, she told delegates the regulator was pleased with the level of dialogue and communication it had received from all mortgage stakeholders regarding the MMR and was keen to stress that “the fat lady has not sung yet” in relation to the final rules.

On the issue of the European mortgage directive, Blackwell told the audience: “Firms want regulatory certainty. Our view is that the directive shouldn’t be delaying the impact of the MMR. We will certainly align the impact of the MMR with the directive to reduce the burden on regulatory firms.”

Blackwell says the most contentious part of the MMR proposals with lenders had been the removal of the non-advised sales process.

She adds: “The MMR proposals will mean the majority of sales are advised. This will represent a significant change for lenders and will accelerate the trend towards adviser sales for lenders.”

Recommended

OneSavings Bank to acquire Interbay Group

OneSavings Bank, which is part-owned by JC Flowers, has revealed that it is in advanced talks to buy commercial mortgage lender Interbay Group.

Caption Competition

Nick Horton from Smooth Financial (left) and James Prosser from Clarion Events at the Mortgage Business Expo in Manchester last week

7

AMI hits out at FSA for underhand fee hike

The Association of Mortgage Intermediaries has slammed the Financial Services Authority for being underhanded by hiking mortgage broker fees by almost 10%.

OneSavings Bank is on the verge of acquiring Interbay

OneSavings Bank, which is part-owned by JC Flowers, has revealed that it is in advanced talks to buy commercial lender Interbay Group. The move is believed to be part of OneSavings’ strategy to broaden its lending activities. An announcement on the London Stock Exchange last Friday said: “OneSavings Bank today announces that it has entered […]

Who cares?

By Tracey Dickson, marketing consultant There are almost 7 million carers in the UK – that’s around 10 per cent of the population who provide unpaid care for a disabled, seriously ill or older loved one.1 But according to a report from the charity Carers UK, 20 per cent of people providing 50 hours or more of care […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Exasperated Me 28th May 2012 at 1:56 pm

    Does the FSA sincerely believe that the MMR has had no effect whatsoever on lending?

    No, that would be silly.