Although I am not involved in the Mortgage Market, I think most people will be interested in the way The Financial Conduct Authority (FCA) is viewing the said market It has identified a number of ways it wants the mortgage market to work better for those buying a property.
The regulator’s interim findings on the state of the mortgage market, published recently, showed high levels of choice and consumer engagement.
Over three quarters of consumers switched to a new mortgage deal within six months of moving onto a reversion rate.
Little evidence was uncovered that current commercial arrangements between firms are leading to poor consumer outcomes.
But the watchdog was concerned there is no easy way for a consumer to be confident, at an early stage, of the mortgage products for which they qualify.
The regulator ruled this was a significant impediment to shopping around.
The FCA found a significant minority of customers – around 30 per cent – failed to find the cheapest mortgage for them.
While a number of longstanding customers would benefit from switching away from a reversion rate they cannot, despite being up-to-date with payments.
The regulator found most of these mortgage prisoners took out their home loan before the financial crisis.
The FCA identified a range of potential ways to make the market work better for consumers.
These measures include the watchdog removing barriers to innovation in the sale of mortgages, including those due to aspects of FCA advice rules and guidance.
The FCA is also looking at ways to make it easier for consumers to assess the strengths of different mortgage brokers.
The regulator intends to work with the broker sector to develop metrics to help consumers compare brokers.
The watchdog will also help certain longstanding borrowers who cannot switch, for example with an industry-wide agreement to approve applications for a new mortgage deal from existing customers whose most recent mortgage was taken out before the financial crisis and who are up-to-date with payments.
The FCA is now seeking views on these proposals and intends to publish a final report around the end of the year.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “The mortgage market is one of the largest financial markets in the UK and there have been significant changes to the market since the financial crisis in order to ensure that we do not return to the poor practices of the past.
“For many the market is working well with high levels of consumer engagement.
“However, we believe that things could work better with more innovative tools to help consumers.
“There are also a number of long-standing borrowers that have kept up-to-date with their mortgage repayments but are unable to get a new mortgage deal; we want to explore ways that we, and the industry, can help them.”
Although, as I said, I am not authorised to give Mortgage Advice, I can help with introducing you to someone who can. Just give us a ring if you think I can help.