Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

AMI and IMLA Respond to FCA Mortgage Consultation on Market Access

The Association of Mortgage Intermediaries (AMI) and the Intermediary Mortgage Lenders Association (IMLA) have responded to the Financial Conduct Authority’s (FCA) latest consultation on improving access to the mortgage market. The proposals aim to support first-time buyers and under-served borrowers, with both trade bodies highlighting the importance of adviser involvement and lender discretion.

The AMI welcomed the FCA’s proposals, stating that they could help creditworthy consumers who are currently excluded by existing rules. The organisation noted that the reforms represent a measured approach to addressing barriers to homeownership, rather than a return to pre-financial crisis lending practices. AMI also said there is potential for lenders to take a more balanced view of risk without undermining consumer protections.

A key area addressed in the consultation is the future use of interest-only lending. The AMI supported the FCA’s position that interest-only mortgages should only be suitable for certain borrowers with a credible repayment strategy. The trade body emphasised that the success of the proposals depends on advisers and lenders adopting and implementing them, and called for the FCA to provide clear guidance and practical examples to give advisers confidence.

The IMLA also commented on the consultation, noting that interest-only borrowing can help first-time buyers with affordability, but stressed the need for safeguards and expert advice. The association warned against borrowers remaining on interest-only terms for extended periods without building equity. IMLA suggested that lenders may need to review repayment strategies more frequently than currently required, and welcomed the permissive nature of many of the proposals, allowing lenders to decide whether to adopt new practices based on their own risk appetite and operational capacity.

These developments are relevant to UK letting agents and inventory clerks, as changes to mortgage access and lending practices can impact the rental market and the profile of tenants seeking accommodation.