Gammon said the European directive was ‘a hassle’ for the Financial Conduct Authority (FCA) to implement so soon after the landmark Mortgage Market Review was implemented in April 2014.
“The Mortgage Credit Directive will be another thing to negotiate after the Brexit vote,” he said. “In many ways the MCD was a hassle for the FCA; it was so soon after the MMR and was a massive cost for lenders with legacy systems.
“As it stands, the directive throws up a number of questions in light of the Brexit vote, for example, what will happen to firms using the EU passporting rules to carry out business in the UK?” he added.
“Common sense would suggest that the FCA will look at the impact of the directive on lending and look to minimise that impact by tailoring it to suit the UK market.”
Lenders are also likely to keep an eye on how they lend, as uncertainty clouds the market, Gammon added.
“Lending at higher loan-to-values (LTV) could be scaled back as well as prices increase. The danger is that if this starts to happen then lenders may copy each other to keep a lid on volumes, sending the market to a grinding halt. This calls for a considered approach from lenders rather than jumping in head first.”
