Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what assessment the Government has made of the effect of Financial Conduct Authority requirements for mortgage affordability assessments on the ability of home owners to re-mortgage or switch mortgage provider.

The Government is committed to increasing competition in banking and creating an environment in which firms compete to offer a range of products that suit the varying needs of their customers. Both existing and prospective mortgage borrowers may benefit from shopping around to find the best deal available to them.

The Government has not undertaken a formal assessment of the effects that the Financial Conduct Authority (FCA) Rules on mortgage affordability assessments have had on the ability of borrowers to switch providers.

Although the Treasury sets the legal framework for the regulation of financial services, specific rules are a matter for the FCA whose day-to-day operations are independent from government control and influence.

In May 2016 the FCA published a review which assessed the impact of recent changes to the regulation of mortgage lending. Where lending is affordable, the FCA did not see evidence that the responsible lending rules have prevented creditworthy consumers obtaining loans.

The full review can be found here: https://www.fca.org.uk/publication/thematic-reviews/tr16-04.pdf