From 26 April 2014, the industry will have to take a common sense approach to lending mortgages, with checks for every borrower to ensure they only get a mortgage they can afford.
A further 6% of firms said they did not yet have plans in place for implementation but are confident they will be ready in time. Just 1% of respondents said they would fail to meet the April deadline, but they will not be undertaking any mortgage business until they are ready.
In May 2013, 67% of companies said that they were on track to implement the MMR.
Linda Woodall, FCA director of mortgage and consumer lending, said: “Since the survey was last conducted we are delighted to say that we have seen a vast improvement in the number of firms who consider themselves to be well prepared. Firms who have not yet begun planning need to do so now in order to ensure they can fulfil their requirements come April.”
Both lenders and intermediaries are now stating similar levels of preparedness.
And in each area of the MMR, just seven lenders have requested more information on the rules, indicating that generally there is a good understanding of the rules in the sector.
Intermediaries indicated that disclosure was the number one area where they required more information with advice, training and competence as the other areas where further information was needed. The FCA has produced dedicated information to help intermediaries to prepare.
The FCA contacted those who said they would not be ready to implement on the 26th of April in order to offer advice and support in helping to meet the deadline. Most stated they would be implementing later for commercial reasons. For example, some said they are planning to recruit a mortgage adviser or expand into niche areas, such as regulated bridging loans, later than 26 April 2014.
Of the 85% of firms that are on track 67% have complete plans in places to implement the MMR with 18% having partial plans. Firms with complete plans in all areas have increased from 46% in May 2013 to 67% in January 2014.
The remaining 8% of firms plan to exit the market ahead of MMR coming into force. The vast majority of these firms have written less than 100 mortgages in the last 12 months.