Tough new regulations on lending to homebuyers will reform the mortgage market in the interests of consumers, mortgage advisers say.
In April this year financial authorities launched the Mortgage Market Review (MMR), requiring banks to carry out affordability stress tests and look more carefully at potential borrowers, stoking fears that first-time buyers would find it harder to get on the property ladder.
But a survey carried out among 650 mortgage advisers suggest the MMR will be successful in its overall aims.
The advisers, all of whom had completed their Certificate in Mortgage Advice and Practice qualification within the last three years, said the MMR will lead to the promotion of a more responsible lending culture, greater fairness and consistency in lending criteria and greater stability within the sector.
Changes to regulations included the need for borrowers to satisfy lenders that they can afford a mortgage through evidence of income and expenditure, that interactive sales (for example face-to-face and telephone transactions) must be ‘advised’, and that non-advised sales are only allowed under specific circumstances.
Nearly six in ten (57 per cent) mortgage advisers said they think MMR will be a success and will allow the majority of customers access to the mortgage market.
Among the reasons for their confidence, mortgage advisers pointed to the promotion of a more responsible lending culture, greater fairness and consistency in lending criteria and greater stability within the sector.
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