The Financial Conduct Authority is to investigate mortgage competition, including the introduction of clients to lenders by estate agents.
It’s part of a probe to assess whether mortgage applicants feel they can make an informed choice between rival products and whether they are given the right information to judge whether a mortgage deal represents good value for money.
The FCA’s study, which has got underway this week, will explore two questions - are there advice and tools available to allow would-be borrowers to make effective decisions, and do commercial arrangements between lenders, brokers and other players - including estate agents - lead to conflicts of interest to the detriment of consumers?
The authority says it will also review whether there are opportunities for better technology to solve consumer difficulties.
The FCA first announced the study in May; now that it is underway, an interim report is expected next summer with the final report scheduled for early 2018.
“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” says Christopher Woolard, executive director of strategy and competition at the FCA.
This study will concentrate on mainstream mortgage products for owner occupiers; commercial mortgages, second charge and buy to let mortgages are not under review.