The Financial Conduct Authority has set out a timeline of steps it will take to improve access to mortgages.
As part of its work to review regulation to support home ownership, announced in January, the FCA has set out proposals on how to simplify rules.
The regulator is first launching a call for evidence on current and alternative approaches to stress testing.
The FCA said when lenders decide whether to approve a mortgage, they test whether a borrower could still afford their mortgage at higher interest rates.
As interest rates fall, the current market approach to interest rate stress testing may be unduly restricting access to otherwise affordable mortgages.
Therefore, the authority wants to ensure that firms are aware of the flexibility its rules provide, and that creditworthy consumers can access the affordable mortgage they need, supporting home ownership.
Then, in May, the FCA will launch a consultation on proposals to make it easier to remortgage with a new lender, discuss options outside a regulated advice process, and reduce mortgage terms.
And in June, the FCA will open a public discussion on the future of the mortgage market.
It will consider what the market needs to deliver for different consumers at different stages in their lives and the wider UK economy, and the role of regulation to deliver it.
FCA chair, Nikhil Rathi, said: “We are taking swift action to support people in getting the keys to their own home.
“Firms have the flexibility to help more people become homeowners and we want them to use it.
“There is more to be done, and we will be delivering further proposals quickly to support home ownership and the wider UK economy.”
Chancellor of the Exchequer, Rachel Reeves, added: “This is a welcome action by the regulator to kick-start economic growth and help working families get on the housing ladder.
“The world is changing. That is why we must go further and faster in delivering on our Plan for Change, so we can get more money into people’s pockets.”
tom.dunstan@ft.com
What’s your view?
Have your say in the comments section below or email us: ftadviser.newsdesk@ft.com
