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. 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.
Lynda Blackwell is a consultant at Thistle Dhu