Issues that the study will investigate are whether tools used by customers throughout the mortgage journey – including advice – help consumers to make effective decisions and if commercial arrangements between lenders, brokers and other parties are devised at the detriment of consumers.
The role of technology in improving any issues identified in the report will also be reviewed, including greater use of digital channels to deliver information or advice.
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 study follows findings published in the FCA’s Call for Input released in May, which evidenced concerns that larger broker networks had a stranglehold on the mortgage market, in terms of their power to control visibility and access to lenders’ products.
Likewise, intermediaries pointed out that many smaller firms struggled to access certain lenders because of the need to balance due diligence of distributors against the volume of business expected.
While the FCA’s work will focus on first charge residential mortgages, the regulator said it will take into consideration any insights regarding commercial, second charge or buy-to-let mortgages. Transactions explicitly in the scope of the review will include: mortgages for house purchase, remortgaging, further advances, product transfer and lifetime mortgages.
In its review of the mortgage supply chain, the FCA will investigate brokers, lenders, borrowers, price comparison websites and mortgage sourcing systems. It will also look at estate agents, developers, third party providers and providers of ancillary services if they affect competition in the relevant mortgage markets.
An interim report is expected to be published by the regulator in summer 2017, which will set out its analysis and preliminary conclusions. Stakeholders will be able to comment by 12 January 2017 before the final report is published in early 2018.
Interested parties can submit comments to the FCA by emailing MortgagesMarketStudy@fca.org.uk
