Mortgage reforms outlined by the Financial Services Authority (FSA) will bring a number of benefits to the sector, it has been suggested.
The Council of Mortgage Lenders said it welcomes and broadly supports the changes, despite previously voicing concern that the FSA’s earlier proposals could prove detrimental to both consumers and lenders.
According to the CML, the FSA has listened to these misgivings and drawn up a set of measures that are more appropriate and workable.
As such, customers will be able to access home loans that are more suited to their individual needs, with sensible safeguards assured.
Paul Smee, director general at the CML, said: “Whilst there is much detail to be pored over, the FSA’s new proposals seem to strike broadly the right balance.”
The industry figure noted his organisation is looking forward to liaising with the regulator to make sure the process for implementation runs smoothly and any wrinkles are ironed out.
As part of its Mortgage Market Review, the FSA stated an affordability assessment should be carried out before a mortgage agreement is made, the effect of interest rate movement is taken into account and interest-only home loans are judged on a repayment basis.
