Lenders respond to report on mortgages for women
Published: 19 June 2013 | Author: Bernard Clarke
We welcome the report published earlier this month by the Government Equalities Office, Banking on Women, which concluded that there was no evidence of systemic gender discrimination in the mortgage market.
The report recognised the fundamental requirement that access to finance must be governed by a regulatory framework upholding responsible lending. Much of the work on the report was undertaken while the mortgage market review was taking place, but that process is complete, with final rules for mortgage lending having now been published and firms preparing for their full implementation from April next year.
The investigation "did not uncover any evidence of a systemic problem," the authors said, but the report went on to say that the absence of evidence did not automatically support the conclusion that there was no discrimination. Rather, it said, there had been little research into this area. It also said that there was a long-standing perception of discrimination against women.
While accepting the fundamental requirement that lenders had to operate within a regulatory framework for responsible lending and assessing affordability, the report said that "at the same time, the regulators and financial services industry should recognise women’s lives today."
More and more women were engaged in the labour market and more were returning to work after the birth of a child, the report said, with one survey finding that more than three-quarters (77%) of mothers went back to work 12-18 months after having a child. "A reformed mortgage market should be one that factors in the reality of working women’s lives when they apply for a loan, including if they are pregnant or on maternity leave," the report said.
It also said that the government would continue to work with the Financial Conduct Authority to ensure that changes in lending following the mortgage market review did not unfairly disadvantage pregnant women or those on maternity leave, while recognising that rules upholding responsible lending remained essential.
The Equalities Office said the next steps included publishing a targeted action plan, which would be devised in conjunction with the CML, the British Bankers’ Association and the Building Societies Association (BSA). It wanted the CML and the BSA to deliver guidance for consumers on what they should expect to be asked as part of the process of applying for a mortgage, and what should not be asked. This guidance should be published by the end of the year, and include a section for women who are pregnant or on maternity leave when applying.
As our recent blog post says, we will now be working with other trade bodies on an approach that will enable lenders to navigate successfully through the regulatory requirements of responsible lending, taking into account – as lenders must – foreseeable changes in circumstances, while ensuring there is no discrimination.