MMR announcement 'excellent news for equity release sector'
26 October 2012
The Equity Release Council has welcomed an announcement regarding the Mortgage Market Review (MMR), which comes into effect next year, from the Financial Services Authority (FSA).
It was announced by the FSA this week that the body has published new rules that it claims are going to put common sense at the heart of the mortgage market.
The FSA stated that its changes to the industry as a result of MMR - which is set to come in next April - will prevent future borrowers ending up with a mortgage they cannot afford.
Director-general of the Equity Release Council Andrea Rozario described this as "excellent news" for the equity release sector in the UK.
She explained it is a good sign that the FSA is looking to make the mortgage market in the UK "more user-friendly for consumers and help people in mortgage limbo", adding: "We are particularly pleased that it looks to ensure borrowers are not discriminated against due to age. An increasing number of people are choosing to work into their late sixties or beyond and this change means they should have some of the same opportunities as younger borrowers."
The FSA was also noted by Ms Rozario to have listened to the concerns of the equity release sector and enhanced the clear provider guidelines as a result.
"With a rapidly ageing population, this market is likely to continue to grow in the future and the MMR will help it to do so," she said.
Announcing the policy earlier in the week, Martin Wheatley, managing director of the FSA and chief executive officer-designate of the Financial Conduct Authority, stated that the new rules are going to help to create a more sustainable market in the UK that works well for everyone, regardless of whether they are a borrower or a lender.
"We want borrowers to feel confident that poor practices of the past, which led to hardship and anxiety, are not repeated," he said, adding an affordability test to check borrowers can meet the repayments of the mortgage they want is at the heart of the plans.
Homeowners wishing to learn more about equity release can contact Key Retirement Solutions.