Speaking at the Mortgage Business Expo, Iain Laing said he was positive there was still “everything to play for” while the FSA consultation continues.
He said Sheila Nicoll, the FSA’s director of conduct policy, had implied there may still be room for manoeuvre and no date has been set for implementation.
However, as it stands, Laing said the MMR would impact up to 25% of Santander’s current lending, compared to a 2% hit from the interest-only changes it has already put in place.
Laing said: “The proposals will take a lot of people out the market. It won’t be democratic, as it will impact business owners and the self-employed far more than those on a steady income. It will also impact those that stretch their affordability, like first-time buyers who we need in the market.
“It will lead to a smaller and more bureaucratic market and the effect on competition will be bigger than the costs of compliance.”
While Santander agrees that the rules on affordability should be in the rules of conduct, Laing said they should remain as principles and that credit scoring had proved far more effective in assessing the risk customers pose.
Laing said: “A regulator pursuing the rules we already have in place would have prevented much of the crisis.
“I think the proposals will make the market harder and quite unsustainable. I can’t see how it benefits customers.”
