Mortgages: safe as houses?

Critics say mortgages have got more expensive without any benefit to consumers during three year’s of FSA regulation

The Independent has reported that mortgages have become more expensive without British consumers getting any extra protection during the three years that the Financial Services Authority (FSA) has been regulating the UK mortgages market.

The FSA became watchdog over the multi-billion pound mortgages industry in 2004. The government thought that people would be able to shop around for mortgages, understand the charges, and be better protected against poor practice – without having to pay extra.

Regulation raises mortgage costs

In fact, the Council of Mortgage Lenders (CML) reckons that FSA regulation has added more than £500 to the cost of buying a home. And Moneyfacts, a financial analyst, says that the fees for mortgages from Britain’s 10 biggest banks and building societies have more than doubled since October 2004.

Meanwhile, the Independent reports, the consumer group Which? have found little difference between the quality of service given to people applying for mortgages then and now.

FSA not protecting mortgage customers

Which? carry out “mystery shopping” exercises to see which firms ensure customers are given proper advice and clearly understand the charges included in mortgages. This helps protect people from poor selling practices – but their evidence suggests people are as vulnerable to mis-selling today as they were before the FSA stepped in.

On the plus side, the newspaper does note that the Financial Ombudsman Service will now help settle disputes between consumers and mortgage companies – which Which? welcomes. And as many as three out of four people say they find the Key Facts Illustrations documents that mortgage companies now provide useful.

Whether they would be so happy if they knew it was costing them £500 remains unclear.

Homebank can meet your remortgage needs

Anyone looking for a mortgage should only deal with a company that is authorised and regulated by the FSA – like Homebank.

Homebank have only the best mortgage consultants, ready to advise you with all your mortgage and insurance needs.

For informative and astute bad credit loan advice, call us to arrange a no-obligation appointment to suit you. Homebank are the ‘people’s mortgage broker’, with more than 3,500 mortgage products to choose from – including products not readily available on the high street.

Homebank’s experienced consultants can find the best product for you. Call Homebank now – free – on 0800 052 3604.