Dec 21 – The roads we travel

We end 2021 still busy as mortgage intermediaries work tirelessly to continue to help customers complete on properties and source funding for even more expensive housing.  We have provided support to those impacted by the pandemic and completed unprecedented transaction levels brought on by the stamp duty reductions and extension.  This is on top of navigating regulatory developments spewing out of the FCA, which show no signs of calming.

For firms involved in household and motor insurance, the FCA’s GI pricing rules apply from the beginning of the new year (1 January 2022).  It’s positive to see the ban on price walking finally come into force.  It will see existing customers charged as fairly as new customers and bring about better GI opportunities for mortgage intermediaries as they should find they are more able to compete with online aggregators.

2022 is set to be probably the most significant year ever for amended regulation.  It starts with the FCA’s consultation on Consumer Duty ending in February with new rules set to be confirmed by the end of July (with anticipated implementation by end of April 2023). This is a fundamental shift aimed at raising the bar across retail financial services, setting a higher standard of care to customers beyond the current rules.  It will replace principles 6 and 7 with a requirement that ‘A firm must act to deliver good outcomes for retail clients’.  This should ensure all firms put customers at the heart of everything they do, throughout the customer lifecycle.  No firm within our sector will be immune from this, even firms that feel they’ve already got this ‘spot on’ will have further work to do.  Product providers and intermediaries will have to work even closer together.

The FCA’s consultation on diversity and inclusion in financial services is also set to land at some point during the first half of the year. AMI is active in this space and encourages firms who have not read our recent Viewpoint report to take a look.  Whilst it is a difficult read and shows the industry has a lot of work to do, we are proud to have taken the leap forward to openly acknowledge there are issues but crucially we are committed to making change happen.

Elsewhere, the green agenda is set to feature heavily.  Government’s Future Homes Standard will ensure new homes are built without fossil fuel heating systems and with higher levels of energy efficiency compared to existing housing stock. Whilst this will apply to new homes built in England from 2025, it does mean that homes undergoing planning permission now will be affected given build lead times.  New rules on upgrading properties to improve their EPC rating will also come into view.

2022 will also mark the last full year of the Help to Buy scheme, which is set to end in March 2023. First time buyers will want to understand their alternative options onto the property ladder and advice will play a crucial role in this. We will continue to see new innovations from the private sector to help bridge the gap left behind after cessation of the Government scheme, together with the expanding First Homes initiative.

In 2022 we also have the opportunity to reshape the Financial Services Compensation Scheme.  Making sure mortgage brokers only pay for what goes wrong in our sector is crucial.  Avoiding surprise invoices and higher regulatory bills might need your support by lobbying your MP later in the year.  We will let you know if we need your help.  We still favour a product levy rather than a charge based on firm’s turnover.

Last but not least, are the plans to change the landscape for Networks and Appointed Representatives.  Both Treasury and the FCA are looking at this and we need to ensure that solutions are proportionate to the mortgage market that already works well for consumers and our product partners.

As the trade body for mortgage intermediaries our core aim for 2022 and beyond is to make sure your voice is heard.  Our lobbying will be critical to protect your futures.  Membership of AMI has to be an essential.  Please look at joining for 2022 if you are not already subscribed.

Robert Sinclair, AMI Chief Executive
AMI, December 2021