ABSTRACT
This chapter looks at the conduct of business regulation of mortgages in the UK and the scope for employing it as a significant macroprudential tool. Many of the issues relating to mortgage regulation hinge on a failure to distinguish between the “credit” and “affordability” assessments. The former is part of the prudential steps aimed at protecting the lender. The chapter examines the key issues and concepts underlying conduct of business regulation in the area of mortgages. The Financial Services Authority remained uncertain how to regulate mortgage conduct of business and expressed concerned about the effect of regulation on the mortgage market. The chapter sets out the legislative and regulatory background to the development of UK conduct of business mortgage regulation. It is possible that UK mortgage regulations may start to restrict access to mortgages, especially after the first few heavy enforcement actions.
