Responsible lending achieved in UK mortgage sector
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A new report from the Financial Conduct Authority has highlighted the ongoing commitment to responsible lending practices that is being taken by the UK`s mortgage providers.
In a welcome update to the organisation`s Responsible Lending Review, the body stated that overall there has now been a strong implementation of the measures imposed as part of the Mortgage Market Review that was carried out in April 2014.
Moreover, there is no evidence that these changes have led to any reduction in ethical practices. Far from it, the measures have in fact strengthened the ability of the UK`s banks and building societies that are offering mortgage products to do so in a responsible manner.
However, it was not all good news for the mortgage sector in this latest FCA update, as a number of concerns were raised by the body relating to the use of best practice for some lenders.
The FCA highlighted a number of cases where there has been a lack of consistent assessment in their own lending practices to ensure there is equality in the decision-making process across the board.
In addition, the FCA also revealed that some firms could be more proactive and consistent in making use of flexibilities and exceptions to the responsible lending requirements for the benefit of customers.
That said, the overall message of the report was one of positivity surrounding the UK mortgage market at present and the FCA was quick to point out that, even in cases where recommendations for improvement were made, there was no evidence that the latest rules have prevented firms from lending responsibly.
Responding to the details of this year`s Responsible Lending Review, director of strategy and competition at the FCA Christopher Woolard stated that competition plays a crucial role in ensuring the mortgage market works effectively and the measures introduced in the wake of MMR are now helping to ensure this is the case.
He concluded that `for millions of consumers a mortgage is one of the biggest financial transactions they will enter into in their lifetime, so it`s encouraging to see firms embrace the spirit and the letter of [the FCA`s] rules`.
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