FCA sending weekly survey to mortgage lenders to ensure customers treated fairly

City regulator the Financial Conduct Authority (FCA) sends weekly surveys to mortgage lenders to gather information on rates and availability amid fears of a mortgage crisis.

As the regulator for mortgage lenders and administrators in addition to the Prudential Regulatory Authority (PRA), the FCA liaises with lenders on a daily basis to monitor the market.

The investigation asks whether the lender has made changes to interest rates or has discontinued products.

In the weeks following the then chancellor’s fateful mini-budget on Sept. 23, mortgage rates rose significantly, with the average two-year fixed rate for all LTVs peaking at 6.65 percent on Oct. 20, according to Moneyfacts.

The last time the average two-year fixed-rate mortgage was 6.5 percent or more was in August 2008 at 6.94 percent.

It has since fallen, with some lenders, including Natwest and HSBC, announcing rate cuts. By October 28, the average two-year fix had fallen to 6.48 percent.

However, the Bank of England is expected to raise its key rate by 0.75 percent when its Monetary Policy Committee meets on Nov. 3, in a bid to curb inflation, and this could lead to rates going back up if lenders pass the hike. .

The FCA’s investigation is designed to provide regulators with an overview of the issues facing businesses and consumers. It is not known how long the surveys will be collected.

As interest rates have risen, the regulator has been working with lenders to ensure consumers are treated fairly against the pressures of the cost of living.

Mortgage rates have risen rapidly in the wake of Kwasi Kwarteng’s ill-fated budget

Aside from rising mortgage rates, borrowers have also been hit by a reduction in the choice of home loans available to them.

Uncertain about the price of products in the wake of the mini-budget on September 23, some lenders withdrew loans from the market, with low deposit rates aimed at hitting first-time buyers in particular.

A week after the tax cut budget, the number of products on the market had fallen 43 percent to 2,258 loans – the lowest figure since May 2010. The number has since risen to 3,063 according to data from Moneyfacts.

Research by Citizens Advice found that one in four mortgage holders will be unable to make their monthly payments if they increase by £100, the figure rising to nearly half of borrowers if they increase by £250.

The charity also found that one in seven mortgage holders had already cut back on essentials to make ends meet.

A mortgage crisis is feared as fixed-rate borrowers have to refinance at much higher prices when their deal expires.