Changes to CCCFA finally revealed

The act was widely attacked for needlessly adding expensive paperwork to mortgage advisers, and for blocking credit to solid borrowers who would normally sail though the approvals process.

These outcomes led to a blitz of criticism and the Government agreed to review the new rules less than two months after they were enacted.

The first of two tranches of that review process is well underway and draft proposals have just been given to the lending industry for further feedback.

The proposals include excluding savings and investments from the definition of the ‘listed outgoings’ of a would-be borrower.

They also propose that when would-be borrowers' likely living expenses are benchmarked against statistical data, then there is no need for lenders to trawl through their bank statements.

This last proposal would remove the notorious cups of latte that got added to a customer's living costs. The rules on this were so onerous, that lenders did not have the leeway to enquire about how this spending might change after a loan was agreed to.

This rule applied even though most borrowers trim their expenses as new obligations fall due, especially mortgage payments for something as important as a home to live in.

The proposed changes would allow a lender to enquire into likely behavioural changes such as these.

Other changes refer to issues like a borrowers' 'reasonable surplus' , and any 'obvious' affordability of a loan.

These and other changes are hoped to be enacted in June after the current period of consultation is dealt with.

The second tranche of reform is still being analysed by MBIE officials.

The proposed changes can be found here: :