We need innovation not more regulation

lee gladwell

Two interesting mortgage stories hit the press last week. The first, from Halifax, revealed that two-thirds of potential first-buyers believe they have no prospect of getting on to the property ladder.

The other came via a report from the Institute for Public Policy Research which called for lending restrictions including a 10% minimum deposit for mortgages.
The former illustrates that consumers are unclear about the options available to them from the whole market, and worse still that many are giving up. Given the high proportion of people affected, it demonstrates the important role advice has to play in encouraging and informing consumers.

We were delighted with plans by the Association of Mortgage Intermediaries for a potentially national advertising campaign to promote mortgage advice. This is great news as our research shows many consumers do not understand the full scope of advice on offer from independent advisers.

We disagree with the IPPR report’s proposal to introduce more restrictive product regulation. The industry needs greater product innovation to help people, not more product regulation.

But the report does reinforce the need for lenders to continue to demonstrate responsible lending.

Industries sometimes get the regulation they deserve, and by showing that we’re taking responsibility for our own industry standards, we can avoid greater regulatory intervention in the future.