The Financial Conduct Authority says it is to hold a review of the mortgage market after last year’s controversial MMR to see how it has hit consumers and the housing market.
Speaking at a conference on the mortgage market in London the FCA's director of strategy Christopher Woolard, said:
“No-one, frankly, wants to return to the unaffordable lending practices of the past, where almost every application was approved. And this is likely to mean (among other things) that assessments of mortgage applicants’ circumstances will continue to require more care than they did pre-crisis.
“We need to remain alert to how firms are interpreting them and the effect on consumers. That is why we will be undertaking a mortgage market study soon, which will include a review on key aspects of the implementation of the MMR.
“We do, however, have to remain sensitive to the impact of these reforms over the long run. And we certainly need to keep focussed on outcomes and whether the market is working well. Even if we believe our rules are proportionate, we need to remain alert to how firms are interpreting them and the effect on consumers.
“That is why we will be undertaking a mortgage market study soon, which will include a review on key aspects of the implementation of the MMR.”
In April of this year the National Association of Estate Agents reported that two thirds of estate agents suffered a decrease in buyers following the MMR.
On the first anniversary of the MMR being introduced, Mark Hayward, the association’s managing director, said: “A drop in the number of buyers is the direct result of a slow-down in acceptance of mortgages, with it now taking an average of 50 days to receive a mortgage offer. This increases the risk that sales won’t go through and puts unnecessary pressure on any chain transactions.”
In today’s speech the FCA’s Christopher Woolard also hinted that the authority would look at trying to increase competition amongst mortgage lenders, to the benefit of consumers.