The FCA is to carry out a review of the mortgage market six months after the implementation of the Mortgage Market Review due to the fast moving nature of the market.
Minutes of the FCA’s September board meeting, published yesterday, show the board agreed it should review the state of the mortgage market six months on from the MMR. The MMR is due to come into force in April 2014.
A spokesman for the FCA said this is likely to be an internally commissioned report to the board, rather than a full post-implementation review.
The spokesman said: “The mortgage market is developing quite quickly at the moment. Recent figures have shown a significant rise in lending, and first-time buyers are returning to the market so we want to make sure the market is working properly for consumers.”
Figures from the Council of Mortgage Lenders published yesterday show gross mortgage lending hit £17.6bn in October – the highest monthly total in five years. Lending was up 37 per cent on the £12.9bn advanced in October 2012.
The minutes also show members of the board questioned whether the “highly automated” approaches to underwriting adopted by some lenders meant some borrowers were struggling to obtain mortgage finance.
Board members questioned whether those being turned away from lenders with automated approaches “were being serviced elsewhere”.
They also questioned whether the mortgage market is working in a competitive way, particularly regarding the use of exit fees.