The UK financial watchdog is launching a review of the mortgage market to see if customers could get a better deal. The Financial Conduct Authority said it will be looking at how competition in the mortgage sector can be improved and whether consumers are in position to understand if products and services are good value […]
The UK financial watchdog is launching a review of the mortgage market to see if customers could get a better deal.
The Financial Conduct Authority said it will be looking at how competition in the mortgage sector can be improved and whether consumers are in position to understand if products and services are good value for money.
The market study will explore the incentives estate agents have to refer consumers to use their in-house broker and whether this leads to worse outcomes for consumers.
It will also look at the relationship between lenders, brokers, price comparison websites and providers of other services such as estate agents, surveyors or conveyancers and whether these may be affecting competition.
The FCA will review whether there are opportunities for better technological solutions to problems it identifies, including greater use of digital channels to deliver information or advice.
The review will focus on residential mortgages, remortgaging and switching. It will not examine commercial mortgages, second charge or buy-to-let mortgages.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “As a mortgage is likely to be the biggest financial commitment most people make in their lifetime, we’re keen to ensure that competition in the mortgage sector is healthy and working to the benefit of consumers.”
The Council of Mortgage Lenders welcomed the report and said a clear understanding of what drives and influences products would be good for the customer interest.
Paul Smee, CML director general, said: “The FCA’s rule changes in 2014 created a seismic shift in how mortgages are sold. It is entirely right that the regulator reviews their effect, as well as how commercial relationships in the market have developed in the light of the new environment.
“Any opportunity to review how the market can best work for the benefit of consumers is an opportunity worth taking, and we will be participating constructively.”
The FCA said it will publish an interim report next summer, with a final report in early 2018.
