The Financial Conduct Authority (FCA) wants lenders to be more flexible and offer first-tome buyers greater access to mortgage deals.
When lenders decide whether to approve a mortgage, they test whether a borrower could still afford their mortgage at higher interest rates.
As interest rates fall, the current market approach to interest rate stress testing may be unduly restricting access to otherwise affordable mortgages.
The FCA wants to ensure firms are aware of the flexibility its rules provide, and that creditworthy consumers can access the affordable mortgage they need, supporting home ownership.
To consider further improvements quickly, the FCA will shortly launch a call for evidence on current and alternative approaches to stress testing.
Then in May, the FCA will launch a consultation proposing early ideas to simplify its rules and benefit mortgage consumers, making it easier to:
And in June, the FCA will open a public discussion on the future of the mortgage market. Alongside all interested parties, the FCA will consider what the market needs to deliver for different consumers at different stages in their lives and the wider UK economy, and the role of regulation to deliver it.
Nikhil Rathi, chief executive of the FCA, said: “We are taking swift action to support people in getting the keys to their own home.
“Firms have the flexibility to help more people become homeowners and we want them to use it.
“There is more to be done, and we will be delivering further proposals quickly to support home ownership and the wider UK economy.”
Chancellor Rachel Reeves said: “This is welcome action by the regulator to kickstart economic growth and help working families get on the housing ladder.
“The world is changing. That is why we must go further and faster in delivering on our Plan for Change, so we can get more money into people’s pockets.”
Read the orginal article: https://propertyindustryeye.com/fca-seeks-greater-flexibility-to-support-home-ownership/
