If someone can’t get a mainstream mortgage, they should be informed of other available options. It’s hardly a radical idea…
It has been nearly three years since the Mortgage Market Review entered force and the impact has been significant. For starters, most mortgages are fully advised, borrowers must provide more information on their income and spending, and liar loans are dead.
Last year, the European Mortgage Credit Directive added another layer of regulatory change, such as bringing second charges into the FCA’s auspices. A flurry of further rules to supplement the MMR and MCD include those for buy-to-let from the PRA.
All these changes can make sense on their own but they create pressure pockets for borrowers such as landlords, the self-employed and those over 40. Those who are declined can feel they have nowhere to turn. No one is saying all advice givers should expand their offerings to the specialist sector but the industry has a moral obligation to support those who have options elsewhere.
That is why we are launching a campaign to help borrowers crushed by the current credit markets and the apathy in the advice chain. We have written to housing minister Gavin Barwell about our concerns.
The FCA could look at expanding the range of information and options that consumers have at their disposal. It could provide signposting to specialist deals they are not aware of. Too often, borrowers miss out on deals because they do not know of them.
This is not a radical idea. For years, the pension market has tried to ensure retirees are given full information on their annuity choices. In the delayed Dilnot reforms to the financing of long-term care, the Government legislated to ensure anyone buying LTC insurance received signposting to advice. A similar principle could apply to mortgages: if an individual cannot obtain a mainstream mortgage, they should be informed of other available options.
Credit-crushed borrowers – so often ignored – should receive more attention across all levels of the property chain. We hope Mr Barwell is listening.