Unusually for the mortgage market, the last few weeks have seen the Government grabbing more headlines than the impending regulation by the Financial Services Authority (FSA). Although statutory mortgage regulation was originally a concept originating from central Government, Parliament has now stepped up its efforts to impact on the market directly.
The Government is pressing ahead with its plans to reform of the sale of private housing and will ensure the long-awaited Home Information Packs (HIP) become compulsory under the Housing Bill, due to be passed this winter. The Office of the Deputy Prime Minister has decided to push it through, despite repeated warnings from some in the industry that it is not workable in this form.
It also has designs for the private rental sector that will force local authorities to issue licenses for houses of multiple occupation (HMO) and issue them with powers over “bad” tenants in the private sector. Again, it has ridden roughshod over queries as to definitions of HMO, and the issuing of powers to local authorities to deal with private matters is strange, to say the least.
In a separate move, a House of Commons Select Committee set up to look at the problems in the endow-ment market has severely criticised the insurance industry. It called the industry “complacent” and “incompetent”. It is true that some do have a case to answer for their actions in the past as regards mis-selling, but it is very easy to criticise with the advantage of hindsight.
However there is some positive news, with the announcement that the Treasury is to consult on whether the sale of home reversion plans should be FSA-regulated. But Parliament, and especially Government, must not fall into the trap of meddling with a market for the sake of it. Some aspects do require tightening up, but to interfere in a successful sector that is largely self-governing is to risk tampering with market forces and consumer confidence, and could create more problems than it solves.
Ben Marquand, editor