Hosted at the StoneX Stadium on Thursday 12 November, during a discussion chaired by Paul Adams, sales director at Pepper Money, panellists discussed the impact of regulation on borrowers, mortgage advisers and lenders.
More personalisation for customer circumstances
Jonathan Stinton, head of intermediary relationships at Coventry Building Society, said regulation “presents a really positive opportunity”, encouraging a move “away from a standardised type of customer.”
Likewise, Aidan Walker, senior national account lead at Skipton Building Society, said the changes would allow lenders to develop lending policies that reflect modern life, while establishing new safeguards and gaining a better understanding of where lender’s new risk appetite lies.
The industry is already seeing changes, particularly around lending at higher loan-to-income (LTI) multiples, he said, with lenders adapting their individual propositions to target customers who could demonstrate affordability.
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As of October, lenders were no longer restricted to the 15% ceiling for lending at 4.5 times income.
Walker said the changes would “really just allow us to utilise the spare capacity that was already within the existing framework”, adding that lenders were already innovating.
Simon Coward, regional manager for London and the South East at Halifax Intermediaries, said the review placed greater emphasis on a “personalised assessment of a customer’s ability to maintain or repay a mortgage”, rather than relying on standardised criteria.
Improved access to housing market
However, Stinton warned that affordability remained under significant pressure, making mortgage advice particularly important in helping borrowers understand how much they could sustainably afford to borrow.
Asked whether there were particular borrower groups advisers should be approaching differently, Walker said the changes could open up more options for customers.
The FCA identified several groups who could benefit from improved flexibility from lenders, including those with variable incomes, self-employed borrowers and those with minor credit impairments, for instance.
Walker said the average borrower was unlikely to be aware of the number of lenders operating in the market, particularly given that many are only accessible through intermediaries.
“There’s more ways to access the housing market than there [have] ever been before,” Walker said.
Stinton said lender appetite would continue to evolve as the industry waited for the FCA to publish its final proposals.
Coward said the regulatory changes had formalised good practice that was already taking place across the industry, particularly in relation to Consumer Duty.
