"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"
The market study will explore whether the available tools (including advice) help mortgage consumers make effective decisions.
It will also investigate whether commercial arrangements between lenders, brokers and other players lead to conflicts of interest or 'misaligned incentives' to the detriment of consumers.
The FCA will also review whether there are opportunities for greater use of digital channels to deliver information or advice.
The FCA aims to publish an interim report in summer 2017, setting out its analysis and preliminary conclusions, before publishing its final report in early 2018.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, 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.”
Robert Sinclair, Chief Executive of AMI, commented: “We remain very supportive of this review to ensure that the market allows the right product to get to the right customer and ensuring there are not commercial conflicts which are detrimental to consumers. We strongly support the restriction to the first charge residential market and the inclusion in scope of internal product switching. We are hopeful that this review will size and assess the extent of execution only in product switching and whether this might harm consumers in a rising rate environment.
"The decision to look at how consumers access information through best buy tables and price comparison websites as well as directly via lender and broker websites and apps is well founded. In addition ensuring there are no soft inducements in the areas of PCWs and even in sourcing systems will ensure that the market is robust.
"AMI will support the work on panels and the impact of restrictions, particularly where it is a panel of one. Whilst we do not feel that the current procuration fee payments influence broker advice due to the relatively small differentiations between lenders, it is positive that this will be reviewed. However it is hoped that the team will look at this as having elements of costs substitution in the chain and is not a pure added cost.
"We will be working closely with member firms and the FCA throughout the review period.”
