The regulator is set to formally launch its Mortgage Market Study towards the end of 2016 focussing specifically on the competition issues faced by consumers in today’s marketplace.
Deb Jones, director of competition at the FCA, outlined the key areas the study will focus on. These include seeking answers to questions such as:
- Do the tools currently available to help consumers make their mortgage choices meet their needs effectively?
- What is the impact of increased intermediation in the market, specifically in terms of its impact on consumer outcomes?
- How has increased intermediation since MMR impacted the market?
- Are there any differences between consumer outcomes for those choosing to use an intermediary compared to those who go direct?
- In terms of panels and commercial arrangements within the mortgage market (between lenders, brokers and others) is there a potential for a conflict of interest that could impact on consumers?
- Are these panels/commercial arrangements setting up barriers to entry for new market players?
- Discussing what the FCA was seeking to achieve with the Mortgage Market Study, Jones said the regulator was not “looking to tear everything up” but “our duty is to enable competition to thrive” and “to create the conditions for a healthy competitive process and then let that process run”.
Jones was quick to rule out worries that the study could result in a whole new raft of fundamental changes for the mortgage market to introduce at a time when it was still working through both the MMR and the MCD.
She said: “We recognise there is a fear that the Mortgage Market Study will lead to another wholesale change in the way the market is regulated. However, previous market studies have not resulted in a radical overhaul of the rulebook.”
Jones said that the formal launch of the Mortgage Market Study would come with the publication of its Terms of Reference. She said the regulator was currently scoping out these Terms and would be looking to publish before the end of the year.