Advisers who are unwilling to fall under the FSA umbrella and take refuge in the second-charge and secured loans market will find it only a matter of time before regulation catches up with them, according to David Copland, sales and marketing director at Pink Home Loans.
Copland has called for the FSA to widen its regulatory scope so that second-charge and secured loans come under its guidelines.
He said: “Second-charge and secured loans is a lucrative market. ‘Mortgage Day’ then ‘GI Day’ may have made some advisers shift into the unregulated market in fear of the FSA regime.
“I believe it is an area that should be regulated and is only a matter of time until it will be.”
Andy Pratt, chief operations officer at brokerage Alexander Hall, said: “I can’t believe there has been a massive increase through regulation pushing people into this market.
“I do however expect this area to become regulated and I can see an announcement being made by mid-2005 with regulation commencing the beginning of next year.”
Paul Darwin, head of intermediary sales at Skipton Building Society, said: “Mortgage regulation brought about a change in broker status, some will have found a home in the non-regulated mortgage market or in the second charge market but I have not heard of any major transition.
“Since ‘Mortgage Day’ Skipton has lost very little in terms of distribution.”
Robin Gordon-Walker, spokesman at the FSA, said: “Mortgage and insurance regulation is still bedding down and we are concentrating on our perimeters.
‘I can’t comment on a shift into unregulated areas or whether this area is in the government’s sights.”
