FCA announces plans to build mortgage market of future

I fully support the FCA's plans. As our regulator, I support everything they do.

Affordability isn’t subjective, it’s arithmetic. The only way mainstream borrowing can responsibly expand is through smarter, more proportionate stress testing, possibly by using their own standard variable rates, and a better recognition of how people are actually paid. That means moving away from blunt assumptions and properly assessing different income types such as self-employed earnings, bonuses, irregular incomes and multiple income streams. In the later-life market, however, there is far more scope for innovation from modernising RIO rules to developing flexible products that sit between traditional mortgages and equity release. Done properly, this is about smarter lending, not looser lending.

As with everything, the devil is in the detail. Some of these markets are very under-served and a more common-sense approach is needed instead of a 'computer says no'. Borrowers lives and income streams are becoming more complex but that shouldn't make it complicated to lenders and the regulator.