FCA proposals to boost mortgages supply for underserved markets
Comments from Julian Sampson, Partner and Head of Lending Department at TWM Solicitors, a leading commercial law firm.
The FCA is announcing mortgage rule changes that should improve the supply of mortgages to underserved markets such as the self-employed, the elderly and borrowers with weak credit histories.
Julian Sampson says, “There are still significant parts of the UK’s population who struggle to access competitively priced mortgages so any encouragement from the regulator which will support mortgage innovation should be welcomed.”
“The elderly and the self-employed are two critical markets that are expected to continue to grow. The tough economy of the last few years has meant a lot of people picking up minor marks against their credit histories that don’t reflect their current ability to service a mortgage.”
“The rise in credit repair lending is a necessary reflection of the economic climate, and having a regulator who can acknowledge the difficulties of adverse borrowers within a supportive and transparent framework can only be a positive sign that credit repair lending, managed well, must be a viable pathway for borrowers looking to move past previous credit issues.”
Comments on access to mortgages to the elderly to enable them to downsize
Adds Julian Sampson: “The ageing population is creating an immovable lock up of equity as they are unable or unwilling to downsize without viable mortgage products to support them in doing so.”
“If they were more easily able to downsize, they could release housing stock into the market and cash into the economy. The retirement interest-only mortgage has not been as popular as one might think, so any means of loosening the terms of this product must be welcomed.”
“Ultimately, these changes will be welcomed by many of our Specialist Lender and Building Society clients who, time and again, are challenging the norm in how to lend to borrowers by structuring their lending in an innovative way without creating risks.”
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