FSA to consider mortgage effects of CP121

The FSA will consider the links between CP121 and mortgages as it develops the detail of proposals for mortgage regulation, the Treasury revealed today.

The government admits that the finalising of mortgage regulation ahead of changes to the polarisation regime is “unhelpful timing”.

There was no mention of polarisation in the latest consultation on mortgage regulation.

But the government has noted the concerns of respondents who are determined that the FSA proposals on depolarisation “should not be dealt with in isolation” from those on mortgage regulation.

Brokers are particularly concerned that making the choice between multi-tied, tied and independent for products that fall under depolarisation proposals will affect the way they do mortgage business too.

The Treasury says: “Whilst CP121 is concerned with investment business, market failures highlighted in that consultation could similarly occur in the mortgage market.”

It adds: “Some commentators consider that the number of independent mortgage advisers will fall as many consumers will not be prepared to pay a fee for advice and advisers will not generate enough income to stay in business.”