FCA: New focus on shopping around will not dilute MMR 



A new Financial Conduct Authority focus on helping consumers shop around will not dilute the requirements brought in by the Mortgage Market Review, according to the regulator’s competition chief. 

The FCA today brought out its interim report into mortgage market competition, which says there is no easy way for consumers to know which mortgages they qualify for at an early stage, hindering shopping around. 

The regulator says it wants to find ways to aid this comparison by consumers.  

Brokers have voiced concern that this would involve diluting some of the tougher suitability and affordability rules brought in by the MMR and watering down the role of advice.

But FCA director of competition and economics Deb Jones says the two pieces of work will not conflict.  

Speaking to Mortgage Strategy, Jones says: “I see it as complementing what we have done with the MMR in most respects. MMR focused heavily on making sure customers got suitable cover, and making sure customers could afford the products.

“What we’ve done here is add back in factors around price and value.”

Jones adds that consumers can find suitable products, meeting MMR requirements, but that the one they pick might not be the best value compared to other similar products.

She says: “So the shopping around element very much complements MMR.”

Jones says the mortgage market has so much choice that consumers can end up confused.

She adds: “It is a market characterised by an awful lot of different products available. But because of affordability rules and lenders’ own criteria that they choose to have, not every product is available to every customer. So you have a great range of choice, but it is so great that it can be off-putting.”

The FCA wants to step in and find ways that “help the customer and intermediaries highlight what is the actual range of products that genuinely available and suitable for that customer” she says.

Jones says the final form of this is still to be decided.

She says: “We’re quite open minded about what that would look like. It is important to understand that there is no one size fits all solution. I think what we will see emerging is a range of tools and solutions.”

But Jones did say that any tools the FCA helps develop are likely to require a sharing of lenders’ requirements.

She adds: “The one we’ve identified in particular is lenders sharing their information about eligibility criteria with other market participants, who will either be developing those tools or using those tools, so that those other market participants, or the consumers themselves, can filter down those choices.” 




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