The Financial Conduct Authority (FCA) has set out steps that it will take to improve access to mortgages.
The regulator reminds money lenders of flexibility in its rules that can help more people to gain access to a mortgage. This is part of the work, announced at the beginning of the year in a letter to the prime minister, to revise the regulations to support home ownership and the British economy.
When lenders decide whether they approve a mortgage, they test whether a borrower can still afford their mortgage at higher interest rates.
As the interest rates fall, the current market approach to testing interest ress stress may limit access to other affordable mortgages.
The FCA wants to ensure that lenders are aware of the flexibility that its rules offer, and that credit -worthy consumers have access to the affordable mortgage they need, to support home ownership.
The FCA has confirmed that it will soon launch a call for evidence about current and alternative approaches to stress tests.
Subsequently, the FCA will launch a consultation in May that proposes early ideas to simplify its rules and simplify consumers of the mortgage, making it easier to: make remortGage with a new lender; Discuss options outside of a regulated advice process; and reduce a mortgage area
And in June the FCA will open a public discussion about the future of the mortgage market. In addition to all interested parties, the FCA will consider what the market needs to deliver for different consumers in different phases in their lives and the broader British economy, and the role of regulations to deliver this.
FCA Chief Executive Nikhil Rathi noted: “We quickly take action to support people in getting the keys to their own home. “Companies have the flexibility to help more people to become homeowners and we want them to use it.
“There is more to do, and we will soon provide further proposals to support home ownership and the broader British economy.”
Chancellor Rachel Reeves said: “This is a welcome action by the regulator to start economic growth and to help working families to get to the home figure.
“The world is changing. That is why we have to go further and faster in delivering our plan for change, so that we can get more money in the pockets of people. “