MMR has created a risk-averse environment

It is still uncertain as to whether the changes brought in under the mortgage market review have been worthwhile, the managing director of EDM Mortgage Support Services has said.

Joe Pepper said that while the MMR was “always” going to increase the administrative burden on mortgage brokers, it had always been a question of “how much?”.

But he said that the increasing red tape and heightened risk assessments have not necessarily led to an immediately noticeable improvement.

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Mr Pepper said: “The jury is clearly still out on whether the risk assessments under the MMR have actually been worthwhile.

“Improving the quality of the communication platform used by all parties to the transaction could certainly help both ease the administrative burden and improve the accuracy of the risk assessments, leading to higher quality mortgage business, and possibly giving lenders more confidence to lend.”

His comments followed the findings of a poll carried out among mortgage brokers by EDM Mortgage Services, which revealed that 72 per cent of all brokers thought lenders had become too risk-averse.

Mr Pepper added that 39 per cent of brokers also believed that risk assessments were not necessarily more accurate even with the additional checks put in place by the MMR.

Adviser view

Philip Milton, founder of Devon-based Philip J Milton, said: “Just the other day I was wondering what could affect the residential property market and cause the necessary correction. I thought it could be about the regulator’s involvement, especially in the world of buy-to-let properties.

“If the FCA suddenly says that it is high-risk, then advisers could be vulnerable to losses for assisting people to buy properties without a full risk assessment.”