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.
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So does this mean that the likes of the Countrywide group/Connels etc are finally going to be held accountable for the bullying of buyers to be "Financially Qualified" and made to use their brokers or are we just going to talk about it again and then not do anything about it?
Are the FCA going to investigate individual banks and building societies as well to ensure that "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."
What happened to buyers having a bit of common sense and to know that it is better to shop around?
When is the government going to stop interfering in the property market?.
Yes the big corporate estate agents do put immense pressure on the branch staff to secure mortgage business and subsequently on their buyers and sellers. However, it is easier than ever to research the mortgage market and available products than ever before, not to mention plenty of independent mortgage brokers with whole of market access, so I find it hard to believe it is necessary for the FCA to conduct yet another review into mortgage market or that people are not yet savvy enough to shop around.
Further the FCA should concentrate more on enforcing current regulations rather than looking for reasons to add more. As for the government, they should be doing far far more to enable and accelerate house building both in the private and social sectors rather coming up with popularist vote catching gimmicks that further exacerbate the ongoing housing crisis.
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