Speech by Nikhil Rathi, FCA chief executive at the L&G Mortgage Club's 30th Anniversary Conference.
IntroductionIt’s a pleasure to be here celebrating the Mortgage Club’s 30th anniversary. In truth, I came here today with a little trepidation.Not because I might have had to go through a rigorous affordability assessment just to get through the door!But rather because it is fair to say that, as we started our Mortgage Rule Review this year, some reforms have not been met with universal approval among brokers.This is, after all, a market which is serving millions of customers well.Lenders and brokers rose to the challenge through the pandemic, rising costs of living, and rapid increases in interest rates.Arrears and repossessions remain historically low.Thousands of consumers receive mortgage advice daily.Despite elevated housing prices, first time buyer numbers have held up.With over 7,000 products on the market – a near record – the market looks healthy. Sustainable.But our Review is not solely focussed on the current market.We want to enable the mortgage market of the future – one that adapts to fast changing technology, employment and demographic shifts, and consumer preference, need and expectations, particularly in their later years.A market that supports the financial wellbeing of millions throughout their lives, with more people accessing sustainable homeownership.Our response must be bold.Focussed on outcomes, not orthodoxy.So we have asked – who is locked out of homeownership, why and for how long?What does this mean for those households and their financial resilience?Do we need to reevaluate the trade-offs of, at least partial homeownership, against the alternative of renting into retirement, and the additional pension saving it requires?Can some of the nation’s £9 trillion of housing wealth be unlocked more effectively, and put to more productive use, particularly to sustain living standards in later life?What can we learn from others around the world who have tried new ideas?We need to begin answering those questions today – to deliver the market of tomorrow.