• Pensions

    Pensions+

    Whether you're saving for retirement or you are facing decisions at retirement, we can help

    View more
  • Savings Planning

    Savings+Planning

    Saving for the future is important and we can help you select the right product to achieve your goals

    View more
  • Mortgage Advice

    Mortgage+Advice

    We are specialists in arranging mortgages for First Time Buyers, people moving home, 'Buy to Let' mortgages and remortgages.

    View more
  • Investment Advice

    Investment+Advice

    Make the most of your money and don't leave it languishing in Building Society accounts

    View more
  • Equity Release

    Equity+Release

    Allows you to access cash tied up in your home - speak to one of our qualified advisers

    View more
  • Protect Insure

    Protect+Insure

    We can shop around for the lowest cost life cover, income protection and critical illness cover

    View more
 

The year of regulation: 2016 in review

“Regulation, regulation, regulation” describes the mortgage market in 2016, industry leaders say, as Brexit and technological advancements also drove shifts in the landscape.

Following the EU referendum vote on 23 June the market braced itself for the worst. But the immediate impact of Brexit was muted. Mortgage approvals dipped slightly immediately after the vote, but there is evidence that rises in UK house prices are cooling, and there was no obvious knee-jerk panic.

However, the long-term picture is far from clear. Some, such as IHS Global Insight chief UK and European economist Howard Archer, remain bearish on the market’s prospects.

He says: “Housing market activity and prices now look to be at very serious risk of an extended, marked downturn following the UK’s vote to leave the EU.”

Others take a more measured view, noting the full effects have yet to play out and uncertainty is still the main issue for the post-Brexit mortgage market.

Association of Mortgage Inter-mediaries chief executive Robert Sinclair says: “On 23 June, the clear plan that the Cameron government had put forward on housing and mortgages went up in the air.”

Getting ready for regulation

However, it was mortgage regulation changes that came to define the market in 2016.

March kicked off the cycle as the mortgage credit directive came into effect, regulating the second charge market for the first time. March also saw the Prudential Regulation Authority announce it would toughen buy-to-let underwriting standards, which were then confirmed in September.

The buy-to-let market took another kicking in April, when the Government began phasing in stamp duty rises for second properties.

In a further blow in August the FCA wrote to smaller lenders saying it was considering tightening its control on buy-to-let lending.

The regulator is concerned that buy-to-let lenders solely governed by the FCA could present a risk to the wider financial system through substandard underwriting.

The FCA believes this could harm consumers and the rest of the economy.

But the year was almost at an end when the FCA dropped another regulatory bombshell: the hotly anticipated details of its review into the mortgage market. In mid-December the regulator said it wanted to know if consumers have an “empowered” choice between products and services and can understand if these are good value for money.

The review was fiercely opposed, with the Building Societies Association, the Council of Mortgage Lenders, the Intermediary Mortgage Lenders Association and Ami all calling on the FCA not to intervene in the market, arguing it is already competitive.

But Ami and Imla have told the regulator to pay closer attention to execution-only sales and trapped borrowers.

The regulator has also announced it would look at how previous Mortgage Market Review regulation might be harming competition.

It is clear the FCA is in no danger of running out of jobs to do when it comes to mortgages.

Technological change also influenced the mortgage news agenda in 2016, however.

Legal & General Mortgage Club director Jeremy Duncombe says: “We have seen the emergence of robo-advice, with several online propositions entering the market. We expect to see the ‘rise of the robo’ continue in 2017 and we encourage brokers to keep diversifying and evolving where required.”

Source:  Mortgage Strategy

Sam: 23rd Dec 2016 14:00:00

 

Latest News

Lenders relax maximum mortgage age
Lenders relax maximum mortgage age If you're an older homeowner, the last few years may have been challenging if you were looking to remortgage your property.

Read More >>

Drawdown investors remain optimistic
Drawdown investors remain optimistic The onset of the pension freedoms gave retirees more choice than ever over how to spend their pension pot, and many are making the most of that flexibility by opting for income drawdown, whereby their pension savings remain invested in the stock market. Yet this in itself can pose risks, particularly given how volatile the stock market can be, but luckily, investors don't seem to be put off.

Read More >>

Equity release lending hits record £3.6bn
Equity release lending hits record £3.6bn 2018 proved to be another record year for the equity release sector, with latest figures revealing that retired homeowners released £3.6bn in property wealth over the year, the highest annual total ever seen – and by all accounts, 2019 could go even better!

Read More >>

Motivation to remortgage at 11-year high
Motivation to remortgage at 11-year high The financial incentive for mortgage borrowers reaching the end of their current fixed rate deal to remortgage to a new deal has soared to an 11-year high.

Read More >>

What's coming up in 2018....

Read More >>

See all News...
  • Pensions

    Pensions+

    Whether you're saving for retirement or you are facing decisions at retirement, we can help

    View more
  • Savings Planning

    Savings+Planning

    Saving for the future is important and we can help you select the right product to achieve your goals

    View more
  • Mortgage Advice

    Mortgage+Advice

    We are specialists in arranging mortgages for First Time Buyers, people moving home, 'Buy to Let' mortgages and remortgages.

    View more
  • Investment Advice

    Investment+Advice

    Make the most of your money and don't leave it languishing in Building Society accounts

    View more
  • Equity Release

    Equity+Release

    Allows you to access cash tied up in your home - speak to one of our qualified advisers

    View more
  • Protect Insure

    Protect+Insure

    We can shop around for the lowest cost life cover, income protection and critical illness cover

    View more