P2P lending rules to impact mortgage industry, says UK Finance
UK FINANCE has cited peer-to-peer lending rules among the initiatives set to impact the mortgage industry and warned that “multiple, uncoordinated and un-sequenced regulatory and legislative proposals” will increase operational risks in the financial services sector.
Jackie Bennett, director of mortgages at UK Finance, said that the financial services trade body has identified over 20 different regulatory initiatives that are due to conclude or be implemented in the financial services sector in the next 18 months, not including any Brexit-related activity.
She singled out P2P lending rules among six initiatives that she said would “directly impact” the mortgage industry. The other initiatives included the Mortgage Market Study, the Citizens Advice Super Complaint and the Fair Pricing discussion paper.
She said that many others will impact lenders in indirect ways.
“UK Finance and our members are concerned that if we face a conflation of multiple, uncoordinated and un-sequenced regulatory and legislative proposals, this will increase operational risks in the financial services sector generally, particularly as this coincides with Brexit challenges and an increase in cyber threats,” said Bennett at UK Finance’s annual mortgage conference.
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“The mortgage industry has benefited from a period of relative regulatory stability and we are seeing innovation and developments that serve customers better from lenders.
“This is welcome and I’m sure neither we, nor the regulator or government, would want innovation, creativity, competition and judicious risk-taking being stifled because of any uncertainties and opportunity costs caused by the absence of a longer-term strategic approach to legislation and regulation.
“But to be clear, this is NOT a call for deregulation or a “light touch”, simply a call for appropriate “air traffic control” to ensure that interventions are well considered, sequenced and orchestrated to minimise disruption and operational risks in implementation.”
Bennett said that the UK mortgage market is “strong and vibrant” with gross lending set to reach nearly £270bn in 2018.
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However, she warned that the buy-to-let (BTL) market has not fared well this year with BTL purchases now looking likely to be £3bn under UK Finance’s forecast for 2018.
“This is undoubtedly the impact of the various tax, regulatory and legislative changes that have happened to landlords in the BTL sector,” she said. “And with the 2018 tax bills dropping through landlords’ letterboxes (or more likely in their inboxes these days) we are yet to see what further impact this may have on the market.”
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