Banks and building societies have spoken out that the red tape surrounding the mortgage sector, protecting customers, is in fact making it a lot harder for middle aged people and online applicants to get a mortgage themselves.
The Council of Mortgage Lenders (CML) have claimed that the tensions of lenders are strung high, and that the pressure to not break any of the rules that have been instigated over the last few years may be “stifling competition” and causing potential borrowers to miss out. They asked the Financial Conduct Authority to “consider whether the many recent layers of newly imposed regulation” are leaving the market open and free to do business.
Apparently people are keen to research the mortgage that they need and to make the transactions online, but “regulation is seemingly one step behind.”
The fact that borrowing money into retirement is now a red flag in the mortgage sector means that those aged in their forties and above are struggling to get a mortgage.
The regulations in question were brought about as part of the Mortgage Market Review, and implemented in April of 2014.
Lenders now have to assess each individual on affordability, and an over-cautious approach apparently can lead to older people being rejected for mortgages they would actually be able to afford.
Attempts to regulate and fix the housing market seem to have made things trickier for some people to purchase homes. However, it was highly important to ensure that the market didn’t swing out of control again, as it did in the run up to the financial crash.
