Santander UK chief executive Ana Patricia Botin says the FSA’s proposals on income verification would affect the bank’s ability to be a “challenger” to the biggest UK banks.
In the mortgage market review, the FSA is proposing lenders ensure customers can afford their mortgage by checking their income and expenditure, whereas currently intermediaries are responsible for this.
Giving evidence to the Treasury select committee this week as part of its inquiry into competition and choice in banking sector, Botin said that it is important to allow intermediaries to continue checking borrowers’ income on behalf of lenders.
She said: “What is important is that we are allowed to go, as we do now, through independent advisers for verification of income. This is clearly an advantage.”
The share of Santander’s mortgage business which comes from intermediaries is around 80 per cent, meaning the bank would be more affected by the income verification proposals than some of the other high-street lenders.
She said the proposals would affect competition in the sector.
Botin added that the market would suffer if lenders took more responsibility for checking income because it would take longer to approve a mortgage application.
Simplicity Financial Services principal Rob Downham says: “I think it could get to a situation where lenders are slower and the administration is worse. We all know what happens when that occurs – they pull products. And when they do that, there is less competition.”