Our comprehensive review covers all aspects of the market and its regulation. Through the review we aim to deliver a mortgage market that works better for consumers and that is sustainable for all participants.
Background to the review
The mortgage market has worked well for a large number of people over the years and the vast majority of mortgage borrowers will come through this recession meeting their mortgage payments and keeping their homes. However, it has been a cause of major economic distress for others and our existing regulatory framework has proved to be ineffective in constraining particularly risky lending and borrowing.
We are reforming our current regime so that it fits with our revised regulatory philosophy. We propose to implement a number of changes to ensure we have a mortgage market that works better for consumers and that is sustainable for all participants.
Our proposed reforms complement our continuing programme to strengthen the overall regulatory regime and represent a significant shift in our regulatory approach with clearer regulatory requirements and accountability.
They build on our more intensive overall approach to supervision of firms by looking at ways in which we could use prudential and conduct of business levers for macro-prudential and sustainability purposes. They also examine how our supervision can deal robustly with those firms who adopt high-risk strategies, by being prepared to intervene where business models and strategies create undue risks for firms, consumers and the financial system generally.
The proposals include, for the first time, provision for regulating and banning specific product charges and a requirement for lenders to assess affordability for all mortgages.
