Speaking at the Financial Services Expo (FSE) yesterday, the Financial Conduct Authority (FCA) said it is to issue a Discussion Paper before the end of the year on mortgage product terms and conditions, responding in part to the recent decision by West Bromwich Building Society to increase tracker rates on its buy-to-let mortgages.

Linda Woodall, director of mortgages and consumer lending at the FCA, acknowledged the issue of potential consumer detriment if lenders choose to change mortgage product terms and conditions.

She added that although the change in rate by West Bromwich BS was in the buy-to-let market – which is not regulated by the FCA – there was still good reason for it to look at such action on a case-by-case basis.

The Discussion Paper will, she said, look at ‘whether the existing rules are fit for purpose’ and also look generally at whether ‘there was a contradiction between a legitimate reason for changing product terms and conditions’ with any consumer impact such a decision might have.

Woodall also highlighted a number of issues which were currently causing the FCA concern, one being the introduction of so-called ‘hybrid lifetime mortgage products’ and the calls from some in the industry to allow those without lifetime mortgage permissions to provide advice on them. Woodall reiterated the regulator’s stance that such products could only be sold by advisers with the appropriate lifetime mortgage permissions.

She also said that non-regulated bridging lenders’ sales and processes remained a concern as did the practices of some non-regulated packagers who may be overstepping the mark and straying into the advice arena with consumers.

“Some packagers are getting into direct dialogue with consumers,” she said. “It doesn’t take too long until you get into the advice process. That is a regulated process and should be carried out by an adviser.”

Woodall was non-committal regarding a time when an individual mortgage adviser register would be implemented. “I recognise this is a source of frustration for all,” she said, “however I cannot give a definitive time when we would be able to make those provisions. It is still very much on our mind.”