FCA launches review of mortgage market
The FCA's investigation follows the launch of the controversial Mortgage Market Review in April last year.
The City watchdog today launched a review of the mortgage market amid concerns tough new rules may be stifling competition and making it harder for some buyers to get a loan.
The Financial Conduct Authority (FCA) will consider whether consumers have access to the information they need about mortgage products and services to compare different lenders easily.
It said it was also looking at a range of factors that may act as barriers to new players entering the market, including the introduction of the Mortgage Market Review.
Christopher Woolard, director of strategy and competition at the FCA, said: “For millions of consumers a mortgage is one of the biggest, if not the biggest, financial transaction they will enter into in their lifetime.
“The mortgage sector also plays a vital role in the financial services industry and many areas of the economy.
“Competition can play a key role in ensuring that the sector works well, delivering consumer benefits through lower prices, better customer service, and more product choice.”
The controversial Mortgage Market Review, which came into force in April last year, saw tough new affordability criteria introduced for borrowers.
But there are concerns that the new rules have made it difficult for certain people, such as older homeowners, to get a mortgage.
As part of its review, the FCA will also look at the relationship between businesses in the mortgage supply chain, including brokers, estate agents and valuation services, to see if these effect competition.
The regulator has launched a Call for Inputs and is currently seeking views on competition in the market from interested parties, such as consumer groups and lenders.
It will consider these in conjunction with other work it has done on the sector, to decide if a future competition market study is needed.
Stakeholders will have until December 18 to comment. The FCA will announce whether it will take any further action during the first quarter of next year, when it will also publish an outline of the responses it has received.
The news was welcomed by industry body the Council of Mortgage Lenders (CML), which described it as an “excellent opportunity” for the FCA to review the impact of regulation on the market.
Paul Smee, director general of the CML, said: “The FCA’s role in promoting competitive markets is the part of regulation that best helps foster creativity, innovation and a sharp focus on what drives customers.
“It’s also essential in delivering the kind of environment in which reputable lenders of all shapes and sizes can thrive.
“We will be working with all our members to ensure that their perspectives are fully reflected as we work with the FCA on this vital issue.”