He believes the weight of European directives over the next few years will mean the FSA is forced to change its rules, leaving the UK mortgage market in a constant state of flux.
Cummings said: “I have a worry that if you have constant change it effectively stops firms planning for the future. A lack of stability stops you getting investment. In a sector that keeps changing you can’t have stability.”
Cummings believes the industry needs a minimum of two years stability but argues that this is impossible as when the new Markets in Financial Instruments Directive (MiFID) hits the UK shores the FSA will have to change its Conduct of Business rules, which will eventually lead to changes to MCOB.
He added: “In the next five years we have structured changes to regulation, that’s if regulation pursues its own cause. It has already cost plenty of money; what we don’t want to see is ‘regulatory contagion’ – there’s no need to change it all.”
But Mathew Bright, managing director of Optoma Broker Solutions, believes the stability of the UK mortgage industry will be driven by consumer demand not constant changes to regulation.
“If there is consumer demand there will always be investment because there’ll be money to be made,” he said. “Consumer confidence is much more of a key driver than regulation. What regulation will do is stifle innovation and slow down the dynamism of the market. In that sense it will become a much more staid environment,” he said.
