Britain’s financial watchdog is to probe the mortgage market as part of efforts to improve competition for consumers and ensure borrowers receive value for money.
The Financial Conduct Authority (FCA) is launching a market study to consider if consumers have enough information to choose products, and if they are in a position to understand whether they are cost effective.
We’re keen to ensure that competition in the mortgage sector is healthyChristopher Woolard
The review will also explore if commercial arrangements between lenders, brokers and other players lead to “conflicts of interest or misaligned incentives to the detriment of consumers”.
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 FCA will also review whether there are opportunities for better technological solutions to problems in the market, including greater use of digital channels to deliver information or advice. The regulator aims to publish an interim report in summer 2017, before publishing a final report in early 2018.
Paul Smee, director-general of the Council of Mortgage Lenders, 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.”