Recently, the eccentric founder of the Metro Bank said that British banks did not understand customers.
It is a very sharp and perceptive observation that it took an outsider to spot and, in the main, it has a lot of truth to it.
Just look at customer service at the Metro Bank and what passes for customer service at the majority of our high street banks.
In that we do not have to go further than HSBC, which, if recent reports are true, appears to be using the ill-thought-out mortgage market review to reject interest-only mortgage applicants on the spurious grounds of age.
Apart from being an apparent case of age discrimination, it once again illustrates a point made in Financial Adviser on a number of occasions: that over-regulation of financial services is clashing with government intent ions and with lived reality.
If, as we are told, the wonders of medical science and lifestyle changes mean people are living longer and healthier lives, therefore the extension to the state retirement age; and if people are working longer; and if with recent pension changes people now have access to their pension pots after the age of 55, and even to annuity pots already providing an income, then to say to someone in his 40s that he is ineligible for a 25-year mortgage is confusing.
If a mortgage applicant, in sound mind and with all his or her capabilities, applies for a mortgage while under the age of 50, there is no possible reason why s/he should not be treated the same way as any other applicant.
However, if you over-regulate a system, then it provides at every step an opportunity for some busybody to intervene and rule the applicant ineligible. We predicted this would happen.
Interest-only mortgages worked in the main very well until the ‘experts’ started with unsubstantiated claims about endowment mis-selling and inundating the City regulator with claims about mortgages that still had years to go.
We must return to common sense.
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