Mortgage providers must do more to serve older borrowers and think more creatively, the trade body’s chairman has said.
Speaking at the FCA’s mortgage conference in London on 7 September, Moray McDonald extended his criticism of the market to lenders.
He said CML’s members were not doing enough to serve older borrowers, and promised a report into innovation – or a lack thereof – in the sector by November this year.
Mr McDonald told delegates: “The report card says ‘must try harder’. Innovation must come from mainstream lenders, because most consumers will still go to their bank.”
He also urged lenders to take advantage of demand and a relationship with the regulator that has, he claimed, never been better.
“Innovation came back slowly after the crisis as the focus has been on making sure we are doing business within MMR rules”, Mr McDonald added.
Also speaking at the conference, Edward Oxley, the FCA’s manager for mortgage policy, agreed that the industry should consider whether there was more that could be done to meet the needs of the growing elderly market.
He also noted that their statistics showed that lending into retirement is on the increase, and that the evidence suggests that the MMR has not bitten as hard on the sector as some have suggested.
Jane Vass, head of policy at Age UK, said: “I am not sure the market is diversified and flexible enough to meet the needs of people who want to get older in their current homes, as well as those who do need to downsize.”
This comes as the CML revealed that total lending by the six largest firms grew by 17 per cent over 2014 to £147.3bn.
According to data from the trade body, Lloyds Banking Group remained the top lender in 2014, with a 19.8 per cent market share. Santander came second, at 13.5 per cent and Nationwide was in third place, with 13.2 per cent.
Out of the top 20, seven were building societies, while relative newcomer TSB Banking Group entered at 14.
Adviser view
AMI chief executive Robert Sinclair said that with the industry having now mostly moved on from the MMR, firms needed to “rethink the structure of their businesses”.
Mr Sinclair said: “My plea is for firms to invest in people, technology and back-office support, because if you’re not in that space you won’t survive as the world changes. Consumers will want more rounded advice in the future.”
Additional reporting by Simoney Kyriakou
