It is 11 years since the implementation of the Mortgage Market Review and as a first step in reviewing regulation to ensure that it remains appropriate and supports innovation, it is a welcome start. There are  other areas, specifically to support first- time buyers that could make a material impact, and we look forward to engaging in the discussion paper over the summer on these broader topics.   

 

Although the changes proposed are permissive, our recommendation would be to not implement any changes until the closure of the forthcoming discussion paper and analysis of the responses. There is a  risk of unintended consequences with incremental changes in isolation.

 

As these proposals are permissive changes, it is important that FCA makes this clear in its final policy statement. Clarity that any changes are subject to lenders’ risk appetites and commercial decisions are  vital. Managing the expectations of prospective borrowers and the Financial Ombudsman Service (FOS) will help to avoid unintended outcomes.

 

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