Who regulates mortgages in the UK?

In the UK, there are two main regulators within the mortgage market, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

The FCA regulates all homeowner (residential) mortgages and lifetime mortgages. This also includes equity release to older borrowers. The FCA do not regulate buy-to-let mortgages.

The Prudential Regulation Authority is a part of the Bank of England and create policies that regulated firms must follow. They oversee banks, building societies, credit unions, insurers and major investment firms.   

How are Mortgage Companies Regulated?

Mortgage companies are regulated by FCA and their goal is to ensure honest and fair markets. This is done through protecting customers, the financial market and encouraging competition.

Working alongside the FCA is the PRA. The PRA is part of the Bank of England. They determine the monetary limits that that lender must adhere to, including capital and liquidity. The PRA also go further to require providers to have suitable management. It uses regulation to set standards that providers must follow and will monitor compliance against these. The PRA also monitors the activity of lenders and can step in if they believe lenders are not running efficiently. 

Why is it important to use a Regulated Mortgage Lender?

Mortgage lenders must assess whether the borrower will be able to pay the sum of money due for the mortgage and must not accept applications unless it can be demonstrated that it is affordable.

If you are applying for a mortgage through a regulated mortgage lender, it means you will receive a certain quality of advice and guarantees access to FCA for complaints support, should there be any problems.

Applying for a mortgage through an unregulated lender means that customers are not protected from incorrect advice or miss-selling from lenders or brokers.

Here at The Tipton, all our residential mortgages are regulated. We will consider residential mortgages for homebuyers, people looking to build their own home, those lending in retirement, holiday homes, family assist mortgages. To learn more or get in touch, please click here.