First-time buyers and retirees set to gain from possible mortgage rule changes
The UK’s financial observer launched an important examination of mortgage regulations, potentially alleviated the access to the host for buyers for the first time, the borrowers of retirement and those who have self -employed.
The Financial Behavior Authority (FCA) launched a certificate of discussion that pointed out the beginning of a “public speech” aimed at investigating the benefits and risks of changing the existing mortgage rules.
The article describes areas where regulatory arrangements can provide wider access to sustainable hosting and encourage economic growth. In addition, it also consider how more flexibility can better adapt the products of loans to their individual customer needs.
FCA Payments and Digital Finance Manager David Geale said to the PA news agency: uz We start a public conversation about the future of the Mortgage market, to see what we can do to help consumers to walk around their financial lives and support growth.
“So at the end of this discussion too much: Here are some thoughts, where should we be in the spectrum of balancing risk against opportunities?”
“I think the areas we have opened for discussion will benefit a large group of people.
“But especially people with self -employed, people with variable or unpredictable income, perhaps under vulnerable conditions, we look at some restrictions that may be a good risk of mortgage from the perspective of lending, but the rules may be too strict that lenders can not allow them to look at them a little more holistic.”
Mr. Geale said: “The society is looking at the people he develops in terms of the payments and ways they live.”
He said that FCA examined the first time buyers, long -term tenants who have the desire to enter the housing market and a significant essence in their homes in their home, but to help people who might be “income limited”.
Mr. Geale later added: “What we say is better way to evaluate who is a good mortgage debt.
He said that FCA will receive the receipt from the discussion document and that it would reflect this as a feedback and then decide which areas we actually think we should change the rules ”.
Mr. Geale described the discussion of the discussion on the right balance as a “exciting way”.
“We aim to do this quickly, we are not hanging around. We have already moved in some places where we think there was a place to do this.”
The regulator’s data shows that for the first time in 2024, two -thirds (68%) of the buyers borrowed for 30 years or longer.
The article said: “Many people’s employment patterns in the UK are now very different from the previous generations. Short -term contract, zero -hour contracts and more people have self -employed.”
The regulator wants to feed feedback about both home purchase and later self -employed or variable income in life to support mortgage access.
FCA is also looking for an opinion on whether the stress test needs to be changed for mortgage. The stress test requires that lenders take into account the potential impact of future changes in interest rates to ensure that a debtor can meet the mortgages of a debtor.
Companies have been made responsible for determining stress rates, but the article suggested that a central stress rate could be determined by updating a forecast model regularly.
However, this proposal, including the elasticity of adaptation of tests to different products, including companies, including some disadvantages, he said.
The document has also attracted more and more attention to reach home owners to help finance through retirement.
“Access to mortgages can be the key to helping people to achieve their financial goals in later life”.
Many loans will accept the income earned up to 75 years of age in purchasing assessments.
However, the article said that some products adapted to old borrowers can usually be more expensive than standard mortgages and may not know all the options available for older people.
FCA said he wanted to help ensure that his rules do not create an obstacle for innovative products.
For example, self -release products, which allow borrowers to be withdrawn not collectively, can be a costly option for some people who do not have a reliable income in retirement.
Among the other points of discussion in the comprehensive article, whether the regulator will interfere with the receipt of long -term fixed ratio to support the receipt; Whether a rent -based purchase assessment is a responsible basis for assessing a possible mortgage repayment ability of a consumer; And whether the regulator will only take more steps to support the mortgages of partially partially interest and partial capital repayment (partially and partially ”).
The regulator only wants to feed feedback on whether the changes in the provisions of interest mortgage for the first time can help buyers.
He also wants to know if more can be done to support the survivors of economic abuse, which is a common mortgage with abuse.
FCA also looks at the mortgage market whether there is any regulatory intervention that can help to address climate change difficulties.
According to FCA, there are about 8.96 million mortgages in the UK and 3.6 million rental households aiming to buy a house in the future.
After the 2008 financial crisis, lending rules hardened. FCA said that this is less than 99% of mortgages since 2014, which led to a more flexible market.
“However, this more cautious approach may have unnecessarily restricted the access of the consumer to the market. As housing prices grow much faster than wages, hosting has become an increasingly difficult request for many people without financial support.
“Increased number of consumers have difficulty in meeting purchasing criteria, accessing a mortgage, and consequently having a host.”
While the regulator can change the future rules, the market will continue to be at the center of the approach of the consumer mission, which requires the surveillance and monitoring of the market and put consumers in the heart of what they do.
He said that he will continue to have high standards and closely monitor the tendencies.
Regulator, among those interested in the article, mortgage lenders, intermediaries, trade bodies, consumer groups, landlords and people aiming to be a host, he said.
The feedback will be closed on September 19. The regulator said it would focus on how to protect consumers and the market before proposing any rules change.
Rightmove’s mortgage expert Matt Smith said: “The regulator opened these discussions and continues to look at targeted regulatory changes that can help people in different circumstances to borrow what they need to buy a house.
“For the first time, we can meet the potential to help buyers for the first time, which can be in a more responsible way, and we can access the sustainable host.”
Authority added: “There are some important regional differences in property prices to be careful in the debates on ensuring that people to borrow more, and the gap between average earnings and property prices stretches more than England, Scotland and Wales in the south of England.
“The desire to support more people to host their desire for hosting needs to be balanced against the potential risks of allowing people to borrow more, so that mortgage debts continue to be responsible.
“This balance is complicated and therefore we welcome the FCA’s approach to opening a comprehensive discussion of what is right.”
In the UK finance, the mortgage director Charles Roe said: uz We acknowledge that there is a need for changes in existing arrangements to support the Sustainable Host to promote the discussion document about the future of the UK mortgage market and to promote economic growth.
“Although mortgage firms will always lend responsible, we look forward to working with our members to determine that FCA can change the rules to move to the housing ladder and move up or down.”
