It is four months since the new MMR rules were introduced, and these are the headline findings from BDRC Continental’s ‘MMR Monitor’ (a monthly study among representative samples of 100 UK mortgage intermediaries that began in May this year, immediately after the launch of the MMR rules on 26 April).
We ask intermediaries ‘how well do you think [named group] are coping with the new MMR rules?’.
The general feeling is that intermediaries themselves, mortgage networks and the FCA are mostly coping well, but there are mixed views on how well lenders and potential borrowers are doing. There has, though, been a trend towards feeling that lenders are gradually acclimatising to the MMR:
For potential borrowers there is no clear trend in how well they are felt to be coping – our results fluctuate month to month, perhaps influenced by recent cases handled by an intermediary or by recent media coverage.
As well as practical issues, such as the slower speed of service nowadays and more restricted access to finance, intermediaries report a polarisation between those consumers who are scared by the MMR and others who are completely ignorant of it:
“They [consumers] are just naïve. Some people are still living in the past when getting a mortgage would be easy…they don’t understand the implications of how MMR affects what they can borrow.”
“I think they [consumers] have seen the changes and are scared.”
In summary, as well as the operational bedding-in of the MMR, intermediaries think there is a need for more clarification of the rules to consumers, to narrow the gap between reality and perception.
Some also feel that there is a need for lenders to clarify what they want from intermediaries and/or for the FCA to clarify the MMR rules to lenders, as some lenders are felt to have been too strict in their interpretation of the MMR.
We will continue our monitoring until October (six months after the launch of the MMR), to see whether intermediaries feel that the MMR beds in better with more time.
Tony Wornell is director of BDRC Continental
