The Financial Services Authority has confirmed proposals will go ahead to require Right to Buy (RTB) customers to receive advice, the final rules in the Mortgage Market Review paper PS12/16 state.
The rule does not apply to a High Net Worth mortgage customer exercising RTB.
The regulator said: “We do recognise that RTB customers may need help and support when making the decision to purchase their home. However, this is separate to mortgage advice.
“We have referred to RTB as being ‘higher risk’ in previous MMR publications because our data shows that RTB customers have been the borrower type most likely to experience arrears and payment problems. However, we believe that the enhanced sales standards and strengthened affordability requirements will improve standards across this market.
“Therefore, we do not see a conflict for lenders in supporting this market, subject to appropriate sales and affordability assessments.”
