Shared ownership on FCA MRR agenda, says regulator head – MNM

Speaking at today’s L&G Mortgage Club conference, Rathi praised the performance of lenders and brokers, especially during the Covid pandemic, the cost of living crisis and the higher interest rate environment.

He added that “when we began our Mortgage Rule Review this year, some reforms did not meet with universal approval from brokers”.

He said the future of the FCA assessment would focus not just on the current mortgage market, but on that of the future.

He hinted that some interest-only loans and share releases were high on the FCA’s agenda.

“Should we reassess the trade-offs of at least partial homeownership versus the alternative of renting in retirement, and the additional retirement savings that would require?” Rathi said.

“Could some of the nation’s £9 trillion of housing wealth be unlocked more effectively and used more productively, especially to maintain living standards in later life?”

But Rathi said there are still “structural challenges” to homeownership for many groups.

He said: “Feedback to our recent discussion paper highlights that if you cannot make a large deposit, do not have family support, are self-employed, have an irregular income, are recovering from a negative life event, have foreign assets and income or have faced minor credit problems – you are likely to find it more difficult or expensive to get a mortgage.

“You all have your own customers for whom it has been unnecessarily difficult. Some of these groups are growing – and there is nothing special about that.

“Without change, more people are likely to rent for longer – with the proportion of people renting in retirement potentially more than doubling by 2041, potentially requiring almost £400,000 more in savings than for those who own a home.

“The market and regulations need to serve them better. We don’t have all the answers, but we want to give companies more options.”