With the regulator stepping up its enforcement action, Alan Lakey, senior partner at Highclere Financial Services, admitted lenders, as well as brokers would see changes to the market, with consolidation likely. He accused the FSA of holding lenders’ product innovation back and said: “The FSA’s focus on responsible lending is stifling market innovation. There should be the facility to obtain loans where the risk to the lender is virtually nil.”
He added: “As a result of responsible lending, market innovation has stagnated.”
However, Sally Lauder, press manager at Alliance & Leicester, said: “Most lenders are using affordability based calculators, which has definitely helped lenders become more innovative. They are constantly looking at product criteria, with technology being the key differentiator in the future. There is definitely room for innovation, while still complying with FSA regulation.”
Robin Gordon-Walker, spokesman at the FSA, added: “As part of our FSA regulation we promote innovation, and I think the UK market shows how innovation has grown.”
