The Financial Conduct Authority (FCA) has announced that it is to review the mortgage market, reported Reuters in December 2016. The review will look at whether borrowers are being offered the best deals and whether or not there is healthy competition between lenders.
The executive director of the FCA, Christopher Woolard, 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.”
According to the Council of Mortgage Lenders, the mortgage industry is worth around £1.3 trillion a year. There are 11.1 million residential mortgages and £220bn was borrowed last year.
The review will also look at the relationship mortgage brokers, estate agents, conveyancers, surveyors and price comparison websites have with lenders. The FCA wants to see if these relationships affect competition.
The FCA will examine property developers who recommend their customers to specific mortgage lenders of mortgage brokers. It has powers to alter rules and guidance that affects competition within the mortgage industry. If it feels that there is not enough competition in the mortgage industry, then it could ask the Competition and Markets Authority to look at the situation.
The FCA is expected to publish its findings and recommendations early in 2018.