The Intermediary Mortgage Lenders Association (IMLA) has responded to the Financial Conduct Authority’s (FCA’s) discussion paper on the future of the mortgage market, backing more flexible regulation as long as consumer protection and access to good advice remain in place.
IMLA said advice is still key, with about nine in 10 mortgages arranged through intermediaries.
The group said the FCA should keep supporting advice-led processes so customers can compare options and avoid harm.
IMLA pointed to the lack of suitable properties as the biggest barrier to first-time buyers (FTBs), not just affordability rules.
The group added that more affordable homes, especially for FTBs, are needed.
IMLA does not support any push from the regulator to promote long-term fixed-rate mortgages.
It said these products are more expensive, less flexible and not popular with UK borrowers.
The group said if there was real demand, the market would have already delivered.
On affordability, IMLA said it wants practical updates to stress-testing, with lenders setting their own buffers instead of a single central rate.
The group also backed using rent payment history as part of affordability checks, but not as the only measure.
Additionally, IMLA welcomed recent changes to the loan-to-income (LTI) flow limit for FTBs, but said any further changes should be based on evidence and lender risk appetite.
For later-life lending, IMLA said the regulator should not step in.
It noted that the main issue is making sure people can get advice from a qualified adviser, who can direct them to specialists if needed.
On Shared Ownership, IMLA reported the main barriers come from how schemes are run, not FCA rules, so regulation would not help.
The group said any energy performance certificate (EPC) rules should treat all tenures the same and lenders should not be made responsible for EPC ratings.
IMLA also backed using artificial intelligence (AI) to speed up admin, but said it should support, not replace, qualified advice.
The group said the FCA should monitor how AI is used and protect consumers.
IMLA stated there is no need for another level of ‘enhanced’ advice for certain groups as it would add complexity and risk over-engineering the advice process.
Kate Davies (pictured), executive director at IMLA, said: “We cautiously welcome proportionate, evidence-led steps that could help more people into homeownership where they genuinely improve outcomes.
“But professional mortgage advice is non-negotiable. Intermediaries are central to helping consumers navigate choice, risk and affordability.
“The UK mortgage market is broadly working well for a wide range of customers and does not need root-and-branch reform.”
Davies added: “Any changes should be measured, carefully staged and developed in close consultation with industry so we widen access without undermining standards.”
