Former FCA mortgage manager Lynda Blackwell has hit out at the regulator’s Mortgages Market Study for failing to tackle the unhealthy dominance of some lenders and intermediaries.
Blackwell (pictured), now a consultant at Thistle Dhu, accused her former employers of focusing on obvious targets and using technology and innovation as a ‘catch-all’ to every problem.
She said: “The regulator has failed to address the detriment caused to consumers as a result of massive funding imbalances that create a dangerously lop-sided market. The self-employed, less credit-worthy and older borrowers are increasingly less well served every day this issue goes unaddressed.
“The paper acknowledges that commercial relationships play a part in intermediary access to products but does not grasp this nettle. The dominance of some lenders and some intermediaries is unhealthy – anyone who has been in the market for any real length of time knows it.
“These are hard things to unpick, they are not straightforward and technology and innovation cannot be produced as an easy catch-all answer to the problems they pose.
“That does not mean the regulator should not try. This paper suggests they have not tried hard enough.”
Blackwell has previously been outspoken about the increased dominance of the big six mortgage lenders in the market.
Currently they account for around 73% of total residential lending in the UK.
She added: “This paper was an opportunity to address some of the fundamental issues facing the mortgage market but it has fallen far short.
“Rather than face some uncomfortable truths, the FCA appears to have chosen the path of least resistance – the market must be breathing a huge sigh of relief.
“This paper points out what has long been abundantly clear – finding the best mortgage is hard and not enough investment has been committed to producing technology that could support better transparency for both customers and brokers alike.
“Lenders have been warned to show the regulator what they’re planning to do about it. Not only does this lack bite, it is also just one small component in a much bigger competitive failure.”
Blackwell left the Financial Conduct Authority in 2017 after spending 16 years at the regulator.