The Financial Conduct Authority (FCA) has produced its first mortgage regulation priorities document, which aims to be a “one-stop shop” for all of the regulator’s objectives for the markets.
The new regulatory priorities document will be published once a year and replaces more than 40 portfolio letters that the FCA previously published.
The FCA said: “They seek to bring together everything we do – whether through regulators or in policy development. A clear, concise one-stop shop. They should act as guidance for company boards and CEOs. You should read these reports carefully, assess the priorities within them – and act where necessary.”
The regulator said it had three mortgage priorities this year.
The first is to improve consumer outcomes under the Mortgage Rule Review. Key points for the FCA are to simplify mortgage rules and help businesses widen access to mortgages for first-time buyers and disadvantaged consumers, encouraging later-life lending and innovation and protecting vulnerable consumers.
The second priority is to stimulate responsible lending and support mortgage providers in financial difficulties.
The FCA said it expects firms to monitor their affordability assessments to ensure they remain appropriate and deliver good consumer outcomes, including as they widen access to mortgages.
The regulator has singled out second-tier lenders and told them to ensure affordability assessments are robust and expenditure assessments are realistic.
The third priority is to guarantee the quality of mortgage advice.
The FCA said it would like to see advisers from intermediaries and lenders recommend products that are suitable for consumers’ needs.
Once again, the FCA pointed to the second charge and said advisers should review it latest report on loans with second charge and “ensuring that they deliver good consumer outcomes,” especially in the areas of record keeping and quality assurance.
The FCA added: “Importantly, we also want you to join us. We welcome your feedback on these reports and our approach to supervision. Share your insights, challenge our thinking and work with us as we refine this new model.”
FCA director of retail banking Emad Aladhal said: “Buying a home is one of the biggest financial decisions people make, and the value built in the property can play an important role in people’s financial future.
“We are updating the rules to give more people access to affordable mortgages, while supporting a market that can innovate and remain resilient. Businesses also play a crucial role: designing mortgage products that meet today’s needs, supporting customers under pressure and providing advice that people can trust.”