You are here: Home - News -

MMR will be “gold standard” EU regulation must match – Terrington

by:
  • 02/11/2011
  • 0
MMR will be “gold standard” EU regulation must match – Terrington
Paragon Group chief executive Nigel Terrington has said that the FSA’s Mortgage Market Review (MMR) will become a “gold standard” for the European Parliament in its attempts to introduce cross-border mortgage regulation to all member states.

Giving evidence to a House of Lords Select Sub-Committee on the EU residential property directive, Terrington said the proposed regulation must be proportionate and not inflict unnecessary costs upon the market, with the UK already under far more complex regulation than other EU countries.

He said: “I understand that the EU needs a better level of regulation across the 27 member states.

“We in the UK are very well down the road to that and [other EU countries] need to be brought up to our standard. We are concerned about an extra layer of regulation that won’t achieve what it sets out to.

“We have a very high standard in the UK. We have the latest MMR paper due and once it is implemented that will be a gold standard of its own.”

CML head of policy Jackie Bennett, also giving evidence to the Lords, said that it remained concerned about how the directive will interact with the MMR.

In addition, little headway has been made on extracting buy to let from coming under regulation, she said, or preventing the loss of the UK’s KFI for an inferior EU-wide information sheet.

She said: “We are ahead of a lot of Europe in terms of mortgage regulation, which is why we need to make sure it is not conflicting. Changing the KFI would cost tens of millions of pounds with no benefit to consumers.

“Some amendments have gone down to remove buy to let from the directive. It is not about it not being regulated, but about whether it is appropriate.

“We need to build consensus across all 27 countries, but because the UK’s buy-to-let market is rather unique, it is difficult to build that support.”

Terrington said the significant differences that exist across the EU’s 27 mortgage and housing markets, particularly in buy to let, mean that the directive must be kept at a thematic level.

He said: “All buy-to-let markets in Europe are moving at a different pace; some are stable, some growing. Ours is growing and it is an area of the market that is in need of support, because it is the pressure valve of the sector. You could damage it by imposing unnecessary, disproportionate regulation on it.

“We are not against regulation, but it has to be proportionate. It would be wrong to shoe horn consumer regulation into a commercial transaction.”

Nevertheless, Bennett told the Lords that “good progress” has been made on several areas, such as stopping the EU from banning lenders from being able to advise on their own products unless they offer advice on all lenders’ products.

There are 0 Comment(s)

You may also be interested in