The Financial Conduct Authority (FCA) has written to the Prime Minister saying it will simplify responsible lending and advice rules for mortgages to support growth in the sector.
In response to the Prime Minister writing to the regulator last year and the Chancellor’s recommendations on growth, Nikhil Rathi, CEO of the FCA, said it wanted to collaborate with the government “in a fundamentally different way to support the growth mission”.
It added: “To achieve the deep reforms necessary, your acceptance that we will take greater risks and rigorously prioritise resources is crucial.”
To reduce the regulatory burden, the FCA said it would also open a discussion on the balance between access to lending and levels of defaults to support homeownership.
This comes as Chancellor Rachel Reeves urged regulators to consider relaxing loan-to-income (LTI) multiples to improve housing affordability.
There will no longer be a need for a Consumer Duty board champion now that the rules are in effect, the regulator said, and it will also ensure future consultations on consumer protection ask if the duty is sufficient, rather than introducing new rules.
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Further, the FCA will consult on removing maturing interest-only mortgage and other outdated guidance, and work with the government to remove duplicate standards such as the Mortgage Charter.
The FCA will also review the proportionality of reporting requirements and remove redundant returns, which is expected to benefit 16,000 firms.
These measures are in addition to its existing plans to streamline its handbook and improve accessibility, continue reducing reporting burdens and make the Senior Managers and Certification Regime more flexible.
There are also plans to make it easier for firms to start up and grow, as well as give firms certainty regarding consumer redress.
