There I was, looking forward to the Christmas holidays, with an excellent year behind us and looking forward to another good one and then ‘ wham! ‘ the Government announced its conclusions to the last round of consultation on mortgage regulation. Nothing could have prepared us for something so implausible.
From early on in the development of mortgage regulation, IMLA and CML members have consistently said the same thing: a regime which regulates information as a means of protecting consumers, was always going to miss the target. Worse than this it was going to be disruptive, expensive and would reduce consumer choice.
We pursued this route because we know that the vast majority of consumers chose their mortgage on the basis of the advice that they receive.
Good clear and consistent information on mortgages, while welcome, was always going to be a secondary issue. In short, if you want to establish a framework to ensure there is better protection for consumers when they buy a mortgage, you have to put advice at the centre and not information.
And so when word came through on 12th December that the Government had considered the responses they had received carefully and had decided as a result to regulate mortgage advice, we couldn’t have been more surprised. Enormous credit here should go to Sarah Wilson and her team at the FSA who have worked so hard to ensure a meaningful consultation took place. We should also recognise the invaluable contribution made by the trade organisations, IMLA and the CML, who have not wavered in their presentation of the message on mortgage regulation. Individual lenders too have made a critical contribution by amplifying what the trade bodies have been saying and ensuring the industry’s weight has been behind the policy line followed by the trade bodies.
All this does, however, leave you wondering quite what will happen next. IMLA members conduct the vast majority of their business with mortgage intermediaries and so our business interests are inextricably linked to the health of the advice industry. We do not fear the regulation of advice: if it is successful it will enhance our business and boost public confidence in advisers. To achieve this though we must have a regime that recognises the importance of diversity in the mortgage advice business and the fact that so many good mortgage advisers are, in reality, small local businesses. Until we see some firm proposals there is little sense in speculating on what shape the regime will take.