A Government White Paper published this month (Modern markets: confident consumers) announces plans to scrap various bits of “out-of-date unsuccessful regulation”.
High on the list is the wealth warning that consumers hear in radio, television and cinema advertising: “Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.” The DTI thinks most people don’t notice the warning in commercials and has concluded that it should feature instead in documents given to prospective customers about the terms of the mortgage.
The regulations will be amended in September 1999 to come into force in February 2000.
Other changes include:
- The abolition of wealth warnings for equity release schemes
- Adoption of the EU method of calculating APRs
- A specific rule for calculating the APR for low-start mortgages