The Mortgage Credit Directive, due to come into effect next year, will create more tightening of lending in the UK, advisers have warned.
According to the Intermediary Mortgage Lenders Association’s latest Intermediary Lending Outlook research, the industry remained sceptical about changes under the MCD. Just 5 per cent of brokers felt the introduction of a second APR would benefit the UK mortgage market, while 70 per cent disagreed.
As well as introducing a second APR, the MCD will replace the Key Facts Illustration document with the European Standard Information Sheet, which according to 68 per cent of brokers, would not be beneficial.
Peter Williams, executive director of Imla, said: “The mortgage market has recently undergone a series of major adjustments, and the industry is once more facing a collective challenge to remain open for business while getting to grips with the latest changes to working practices.
“Every new layer of regulation brings a danger of upsetting the balance between protection and access for consumers with legitimate cases to be granted a mortgage, as well as imposing extra costs and reducing efficiency.”
The Bank of England is set to hold an open forum in November into areas where regulations might overlap or conflict.
Sebastian Hurst, a financial adviser with London-based Plutus Wealth Management, said: “We have just had a deluge of regulation in the past few years and I think the market is still trying to get to grips with that.
“I cannot see more intervention being worthwhile.”