The Intermediary Mortgage Lenders Association (IMLA) has backed the Financial Conduct Authority’s “openness to moving beyond blunt affordability rules”.
The regulator previously vowed to simplify mortgage rules, allowing for flexible products for the self-employed, as well as young people on lower incomes.
IMLA said it was encouraged by the tone of the statement, which reflects a determination to strike the right balance between flexibility and prudence.
Kate Davies, executive director of IMLA, said: “This is a thoughtful and encouraging roadmap from the FCA. It’s clear they have listened carefully to the responses to the discussion paper and are genuinely seeking to strike the right balance between making some rules less rigid while continuing to support responsible lending.
“We’ve been talking for some time about the need to better serve groups who may assume a mortgage isn’t for them, when in fact it could be. With good advice and a more realistic approach to affordability, the market is in a strong position to help more people explore their options.
“As we head towards the end of the year, it’s a welcome reminder that there are reasons to be positive about the mortgage market — and a good moment to encourage more people to speak to an adviser and see what might be possible.”
IMLA welcomed the FCA’s recognition that traditional affordability approaches do not always reflect how people actually manage their finances over time.
This includes moving towards a more nuanced ‘shape of affordability’, particularly in the context of later life borrowing, variable incomes and economic uncertainty.