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Enjoy the breathing space while it lasts – Stephen Smith

by: Stephen Smith, director, Legal & General Housing Partnerships
  • 17/03/2016
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Enjoy the breathing space while it lasts – Stephen Smith
With the implementation of the MCD now upon us, intermediaries and lenders should be able to look forward to a period of relative calm, with no more mortgage-focused regulatory change on the immediate agenda.

This is of course, an optimistic view. Might we really just be allowed to get on with business for a while – bedding in the Mortgage Credit Directive changes, grappling with the plethora of Help to Buy schemes and trying to service a recovering market which seems to be growing well, month-on-month?

But there is a small cloud on the horizon, and that is the worry of what the Financial Conduct Authority (FCA) might do with the findings from the Call for inputs on competition in the mortgage sector.  This closed for consultation in mid-December last year and a response from the FCA is expected early this year.

Taken at face value, this exercise by the FCA, in pursuit of its competition responsibility could simply be a benign health check of what is going on in our industry. It might result in a clean bill of health concluding everything is going well; lots of lenders, lots of products, lots of advice.

And we know that competitive markets are the best protector of consumer interest, and the current market data shows that the proportion of the lending being taken by the top six lenders is now back down to around the level it was pre-crash. With new lenders still coming to market, the hold of the big six will be loosened further.

I do have a slight, niggling concern however, that a regulator, more used to investigating problems and proposing new rules and regulations to resolve them may treat the findings of the Call for Input more like the outcome of a Thematic Review. I hope it turns out we have nothing to worry about.

In the meantime, let’s enjoy the breathing space and get on with providing excellent mortgage advice and services to our customers.

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