At this time of year I’m hoping the seasonal spirit is flowing through you and, after what has been a tumultuous 12 months, you’re sanguine about what has happened, what is to come, and your ability to influence and/or change what might be about to appear over the horizon. At a recent lunch it was suggested I was rather laid back compared to some within the industry, and I pointed out that while I care passionately about certain mortgage market matters, after 42 years in financial services, you soon learn that not everything is worth raising your blood pressure for.
That said, there are obviously occasions when the decisions and/or comments of those within our market make the blood boil. Many within the buy-to-let sector in particular might have spent the last 18 months in a state of perpetual rage at the changes which have been and inflicted on stakeholders. It’s quite obvious, and I’ve stated this many times before, that we are no longer being left to our own devices; the logic appearing to be that buy-to-let is responsible for many of the housing market’s ills, most notably the inability to build enough new homes and the inability of potential first-timers to get on the ladder.
That’s quite patently nonsense in my book but I acknowledge that the private rental sector, and landlords, in particular are something of an easy target and they are never going to be seen in a sympathetic light. Therefore, the various political curbs placed upon the sector – some it has to be said with some merit – were never going to be defended by many outside the bodies representing those who have been impacted the most.
With that in mind, you might think there would be a fair degree of ire focused in the direction of the FCA. But, if this is the case, then I happen to think it’s rather misplaced. Yes, it may well be Christmas, the season of good will to all men and women but I tend to think that a defence of the FCA should not just be for Christmas but all year round.
Now I’ll freely admit this won’t be the opinion of all stakeholders within the mortgage market – and you might have already stopped reading and instead begun to write a comment that I have taken leave of my senses – however I tend to believe that the FCA isn’t just a ‘necessary evil’ because of our market’s inability to police itself, but that it (in very many cases) is actually a force for good and has probably stopped countless individuals from making decisions which would have resulted in their own financial ruin.
Again, this might not be a popular opinion and I can already hear large numbers shouting ‘caveat emptor’ at me arguing that people should be allowed to make decisions for themselves regardless of the consequences. However, I think the FCA is an incredibly positive force for not allowing people to make decisions which could result with them having ruinous levels of debt they can never pay back.
In this world, no-one is thanking the FCA for the role it is playing here; indeed I suspect that no-one is thanking the FCA full-stop, with the many continually voicing the opinion that the market/industry is quite capable of policing itself and therefore as a regulator it is simply unnecessary. Well, I’m afraid history has told us that this is wrong on both counts – left to its own devices, and I put lenders at the front of the queue here, I am convinced that lending activity would be pushed to the nth degree. In other words, the rampant irresponsible lending that we saw pre-Credit Crunch would once again become the norm, and I think we’re all aware of what happened next.
Therefore, the requirement for such a regulator appears obvious to me. Of course, we might hope that mortgage market stakeholders would have learnt from the recent past and not be willing to walk those roads again, but I suspect that without regulatory intervention and rules to follow, many would soon be embarking on that particular journey. Plus, a point that is often forgotten, in my dealings with those responsible for the regulation of the mortgage market you have a bunch of people who genuinely care about all stakeholders, who want it to thrive, to be competitive and not to be gamed. Not forgetting that they want the best for those active within it, especially when it comes to consumer outcomes.
So – and this might be stretching things for most – while you sit down to your Christmas dinner perhaps spare a thought for those regulating the mortgage market. It appears to be a thankless task but, in my opinion, it is a necessary one that is carried out in good faith by good people who appear to be getting it from all sides. I doff my cap to them and wish them (and you) a very Merry Christmas and a Happy New Year.
Bob Young is CEO of Fleet Mortgages
