Martin Lewis offers advice on mortgage overpayments

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The plans come as the Bank of England is preparing to take advantage of its post-Brexit position and allow a “more British style of rulemaking.” Moves will see smaller banks benefiting from being able to set their own rules when it comes to terms and conditions for lending to potential homeowners.

Taking to Twitter to publicise the news, Mr Rees-Mogg said: “The benefits of Brexit keep rolling along.”

The Government will now be scrapping a Brussels imposed rule in which watchdogs were bound by strict rules allowing no room for interpretation or manoeuvre.

New laws will allow the Bank of England the power to make amendments without relying on bureaucratic legislation at every corner.

The outcome will be to allow regulations designed by experts aiming to making markets works, whilst at the same time, moving away from political agendas.

Sam Woods, head of the Prudential Regulation Authority (PRA) – a part of the Bank which sets rules for the City – said in its annual business plans the proposals “will enable us to adopt a more British style of rule-making, with less fine detail in legislation and more ability for us to maintain and develop a coherent and dynamic rulebook”.

Mr Woods said the plan will allow smaller banks to reduce the amount of capital they hold when offering products such as mortgages.

He added: “We are already developing a simpler regime for smaller banks, which will be good both for safety and soundness and for competition – we call this ‘Strong and Simple’ because we have no interest in a weak regime.”

Should the reforms be a success, it could lead to a fall in costs challenger banks face when issuing mortgages.

The result may see cut price deals, and boost competition within the mortgage market.

Ian Gordon, an analyst at Investec, said: “Put simply, it is uneconomic for a challenger bank to operate in the standard vanilla mortgage market.

“The only markets where challenger banks or specialist banks can potentially make a sensible living is in higher-margin products, whether that be professional buy to let, or high loan to value, or lending to non-standard or self-employed customers.

“The current regime forces banks into niche or higher risk products.”

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Anne Boden, founder and chief executive of Starling Bank, speaking to the Telegraph said: “The PRA is taking the right steps to improve competition by simplifying the regime for small banks.

“However, Starling is no longer a very small bank and is unlikely to be able to take advantage of any of the concessions being offered.”

Mr Rees-Mogg’s news was however met with some scepticism.

Arch-Remainer and political commentator Femi Oluwole replied to the Brexit Minister with his own take on Twitter.

He said: “The irony. Small businesses have been strangled by Brexit red tape for 16 months.

“Your article refers to the mere possibility of cutting red tape to make it easier for small banks to offer cheap mortgages and it’s behind a pay wall!”

Is this a Brexit victory to celebrate? Will the move risk plunging the UK into another financial crash as seen in 2008? Has the cost of living crisis ruined chances for potential first-time buyers and homeowners? Let us know what you think by CLICKING HERE and joining the debate in our comments section below – Every Voice Matters!

Warning of catastrophic mistakes of the past, Charlemagne said: “Oh! Back to subprime mortgage lending!

“Remind me what happened in 2008 after a few years of that, please.”

This was backed up by Adam Heaton who said: “Oh great, banks without reserves can dish out credit to those that can’t afford to pay it back.

“Do you not remember 2007/08? Or do you just flit between now and Victorian times?”

Speaking of the cost of living crisis sweeping across the nation, Mrs D reminded Mr Rees-Mogg of the tough times ahead.

She said: “This is a benefit only for those who can afford it.

“In the meantime, the EU capped energy cost rises to 4 percent yet in Britain they are soaring uncontrollably and people can’t afford to heat their homes or cook their food.

“That’s if they can afford food, also costlier because of Brexit.”

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