The Financial Conduct Authority (FCA) has historically said it was unable to change the rules around affordability assessments because of the European regulations introduced as part of the Mortgage Credit Directive.
However, in a Treasury Select Committee hearing earlier this month, Bailey said that after discussions with Treasury both bodies agreed a re-interpretation of the rules could be achieved and that the FCA intended to deal with this
Clayton Shipton, managing director of CLS, said mortgage advisers ought to take ‘immediate action’ and waste no time in being in touch with their customers who are still affected and tell them there will be good news shortly.
He said the FCA, to its credit, has recognised the unintentional consequences of the blanket guidelines it set out and rightly, is acting to relieve the situation.
“It will take a little more time for consultation with the industry to lead to action, but I would recommend that every broker should be going back to their client banks right now and look for the cases where they have been unable to help customers in the past.”
We are already planning to contact customers to let them know there is likely to be good news and that their situations are in good hands with us, he added.
Clayton continued: “In 2019, all of us advisers need to work smarter in a more challenging market to ensure that our businesses continue to be successful. This is a great way to prepare existing customers for the opportunity to remortgage to a better deal.
“But be aware that if advisers don’t take action now, it is highly likely that those customers will go elsewhere for help as soon as the chance to move lenders comes up.”
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