UK Finance says that its members do not want to be borrowing “further cares about the rest of the market”, instead claim that many members “support that it becomes more mainstream”.
This is in response to the Discussion Document of the Financial Conduct Authage Authage Rule Review, released last week.
The article by the supervisor points out that around £ 2.6 tn, of the British £ 9.1 tn housing stock, is owned by people older than 65.
It adds: “If older homeowners have access to a part of this wealth, they may be able to secure a more comfortable pension.”
But the regulator adds that there are “barriers” for later loans.
It says that products that are tailored to older borrowers, in particular lifelong mortgages and visual interest-all home loans, “are generally more expensive than standard mortgages”.
It requires why other financing models, apart from annuity funds, such as via deposits, “are not included, especially where this could lower the costs”?
The watchdog says that it wants to ensure that the “rules do not create a barrier for innovation, and that companies feel confident when launching new offers”.
It points to two products that it says could offer the good options for later food.
The first are products of shares release with which borrowers can deduct each month, instead of in a fixed amount, which adds the regulator “can be a cost -effective option for those who do not have a reliable income when retiring”.
The body also points to “low-start mortgages” that can allow “potential borrowers in the long term to reduce their initial payments without part of the risks of a long-term term”.
But the regulator adds: “None of these products is available everywhere.”
UK Finance points out that one of the first blockers around Late Leen options is the lack of customer consciousness.
The association says: “It is important for all customers to understand all available options, so that they can make a well -considered decision and achieve good customer results.”
Borrowers who want to shrink or want rights often notice that the costs of moving on the financial benefit thereof.
To tackle this, the British financing suggests that the government “could encourage the last buyers who want to move by creating an exemption from stamp rights and avoiding future tax changes that cannot move them”.
When viewing product innovation in later life credit, members are of the opinion that if one borrower can pay the mortgage payments, when the other party dies, this can be an important barrier for the effectiveness of only-pension interest types.
They have asked the FCA to change the rule to “prove an existing customer who can prove that they only pay for their only interest payments, but is unable to repay the full outstanding balance at the end of the term, to switch to a mortgage with a retention without retirement without undertaking”.
It says: “This could create a better result for a customer who wants to stay in his house, instead of staying contrary to their contract (as soon as the duration has expired and the balance remains owed) and the risk of lawsuits and re -declaration.”
Some other specialist members of the later life believe that innovation is hindered by the separation of ‘advising and selling standards’ and ‘Equity release: advising and selling standard’.
Innovative hybrid lifelong products have been created by different members of later life, where the customer can choose to pay or roll up interest rates, but they can only be advised by stock release qualified advisers.
By combining rules in accordance with consumer obligation and the minimum required qualifications of level 3, UK Finance says: “The FCA can break down silos that exist within the regulation, support innovative solutions and improve the results for later food.”
UK Finance suggests that holistic advice should be defined if it qualified to assess the mortgage needs of their customer, at every stage of their lives, with the possibility of recommending suitable solutions of all available options.
The association says: “Our members believe that holistic mortgage advice does not occur, which increases the risk that a customer does not receive a good result.”
“Many of our members, in particular those who are active in the later life market, would welcome a FCA assessment and consultation on the advisory process of the later life, taking into account the expansion of the minimum mortgage qualification requirements to record release of equity,” it adds.
In the meantime, Key Group Chief Risk and Compliance Officer Charlotte warns all later living borrowers the risk of becoming “considerably disadvantaged” in the current market.
Allen emphasizes Silos in mortgage advice reinforced by “having to evolve” regulation to acknowledge the benefits of later life products and the good consumer results they deliver.
She also encourages real estate assets to be included as standard in guidance services supported by the government such as Pension Wise and Money Helper, and financial promotion and disclosure rules for regulated mortgages and release of shares aimed at later food that are consistently applied by lenders and intermediate characters.
Key says that legal change must be aimed at changing mortgage behavior of the company (MCOB), so that mortgage advice that regards all options for all customers of later life is set as standard to improve the consciousness of and access to the full range of lending options.
It wants to see specific regulatory guidelines that require the expectations of the regulations for later life products and the certificate in regulated Equity release (CERER) as part of the certificate in mortgage advice and practice (CEMAP) for all mortgage advisers, with constant courses for professional development.
Allen says: “The use of housing buildings to support pension will provide substantial benefits for individual consumers, society and the economy.”
“But it must be considered prior to a consumer who reaches retirement age if it must fully support them in effectively planning a suitable standard of living in later life.”
“A lack of holistic mortgage advice for customers in later life, in addition to the absence of ownership of ownership of ownership of financial planning, the access of the consumer to suitable options, where customer results run the risk of being driven by products and advisers instead of customer needs to be reduced by the rendation in the sector.”