UK govt and mortgage industry to work to make home lending process more transparent

Taylor Scott International News

The UK government and the country’s mortgage industry have pledged to work together to make sure home lending is available for every stage of life from first time buyers to retirees. Following a meeting between the Economic Secretary to the Treasury, other government ministers and mortgage industry representatives, work is to be done to make lending more transparent. The meeting also discussed the measures that have already been taken to boost help for first time buyers such as Help to Buy and ISAs and how they can be taken forward. It comes at a time when advice given by lenders to borrowers has been found to be mixed in the aftermath of changes brought in last year. In particular there has been criticism of the new questionnaire that all applicants have to fill in so that lenders can ascertain that they can afford repayments with instances of people not revealing all their spending plans for fear of being rejected. A lot of older people and self-employed have also found it harder to get a mortgage. The Economic Secretary to the Treasury, Harriett Baldwin, revealed that since 2010 some 2.8 million mortgages have been advanced, worth a total of £444.5 billion, and by backing the government’s flagship Help to Buy schemes, the industry has helped nearly 100,000 people get onto or move up the housing ladder. ‘The government’s Help to Buy ISA which is due to launch later in the year will get young people on to the housing ladder, while our work on supporting lending to older people will make sure the mortgage market delivers for those who have worked hard all their life,’ she said. We are pleased that the real effect which the mortgage market can have on people’s lives is recognised within government. We take the industry’s responsibilities to borrowers very seriously,’ said Paul Smee, director general of the CML. ‘We hope the improvements we are making to the transparency of fees and charges will help make it easier for people to understand mortgage costs more easily, and will support the many benefits that a wide choice of mortgages brings to consumers,’ he added. Meanwhile, the CML is working with its members, who make up over 90% of lending business for homes in the UK, to improve the advice given to mortgage clients after a review by the financial watchdog, the Financial Conduct Authority (FCA) said that there is room for improvement. Smee pointed out that lenders have had a huge workload implementing comprehensive rule changes in April last year as a result of the mortgage market review (MMR). ‘Those changes have been introduced with little disruption for consumers or to the market more generally. But there was more to be done to refine the ways in which firms operate,’ he said. The FCA found that the quality of advice in the mortgage market was mixed. Some firms were engaging customers in focused and relevant discussions, leading to suitable recommendations based on… Continue reading →

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