On 4 May 2018, the FCA published its interim report into the mortgage market.
Overall, the FCA found a mortgage market that is working well in many respects, but which falls short of the regulator’s vision in some specific respects. For example, the FCA found that there are limitations to the effectiveness of the tools available to help consumers choose a mortgage. This makes it difficult for a significant minority of customers to find the cheapest suitable deal. Also, while many customers are active, there appears to be a number of longstanding borrowers on a reversion rate who could save money from switching but do not or cannot.
The regulator has identified a range of potential ways to make the market work better for consumers. These include:
- making it easier for consumers, at an early stage, to identify for which mortgage products they qualify, to assess and compare those products and, ultimately, to take out a mortgage;
- removing barriers to innovation in the sale of mortgages, including those due to aspects of FCA advice rules and guidance;
- making it easier for consumers to assess the strengths of different mortgage brokers. The FCA intends to work with the broker sector to develop metrics to help consumers compare brokers;
- helping certain longstanding borrowers who cannot switch. The FCA intends to explore options to help these customers, for example 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 consulting on its interim findings and proposed remedies. It intends to publish a final report around the end of the year and will consult on any specific changes required to its rules.