The UK Financial Conduct Authority (FCA) today published an Interim Report looking into competition in the UK mortgages market, as part of their ongoing market study. This provides an update on the FCA’s work to date since the Terms of Reference were published in late 2016.
The FCA found that the mortgages market is working well overall: the level of customer engagement is high, there is a wide range of products available, and the FCA found no evidence that current commercial arrangements between firms are associated with material customer harm. However, the report sets out a number of areas where there is room for improvement. The FCA would like to see better tools developed to make it easier to search for a mortgage, and calls for more information to be made available to help customers choose intermediaries. The FCA is also calling for more to be done to help customers that already hold a mortgage. In particular, the report notes that large numbers of existing customers are currently unable to switch, and many more are free to move and could benefit, but have remained with their provider for a long period of time.
Antti Lemberg, Associate Director in Frontier’s financial services team said: “The FCA has today set out a positive view of the mortgages market, which will be well-received by the industry. The proposed remedies focus largely on data solutions to share information more widely and use it to create new tools and services. This is consistent with the existing direction of travel within the mortgages market, and indeed the financial services sector more broadly. The impact of these particular remedies will be determined by the type of data and sharing mechanism covered by the remedy, and the degree to which the FCA is willing to amend its own rules. The FCA and industry will need to work closely together over the coming months on these issues, ahead of the final report due later this year.”
Frontier regularly advises firms on issues relating to financial services in the UK and Europe.
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