The Financial Conduct Authority (FCA) has issued an open invitation to consumer groups, individuals, lenders, brokers, builders, estate agents, academics, think-tanks and the public to share their views and experiences of the state of the home loans market.
The sector is worth £1.3 trillion of property debt and the FCA’s “call for inputs” is likely to lead to a full market study which could require reform to the rules governing the sale of home loans.
The FCA’s appeal comes only a year after the regulator introduced the Mortgage Market Review (MMR), which transformed the rules that lenders could apply when judging affordability and required most borrowers to take advice when getting a mortgage.
The regulator is concerned about people taking out unsuitable mortgages, paying too much for them and often misunderstanding the loans they are taking on. They are also worried about the problems experienced by older consumers in obtaining mortgages in the absence of steady or high income. It is also concerned about the many different types of home loans including repayment mortgages, interest-only, discounted, fixed-rate, tracker and offset.
The FCA’s call for views includes the rental market - which it does not currently regulate - so buy-to-let landlords and lenders will also have an opportunity to share their views.
Martin Codd, head of Penningtons Manches’ property entrepreneurs group, said: “The FCA's wish to understand how the mortgage market is currently working is to be welcomed. In practice, we are finding that elderly clients are being disadvantaged and it seems that only those with access to a good broker can get their offers issued fairly quickly.”
Anyone wishing to contribute can email their comments to MortgagesCallForInputs@fca.org.uk by 18 December 2015.