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News Analysis: Industry hopes FCA focus on price will not persist

Anticipation mounts over mortgage market study due in Q1

The FCA mortgage market study is due to be unveiled during the first quarter of 2019, following on from the interim report released in May.

As anticipation mounts for the final findings, most commentators believe that the focus on price in the interim report should not be repeated.

Knowledge Bank chief executive Nicola Firth says: “There has been a huge focus on price and whether borrowers are getting the lowest rate mortgage, but the fact is that the very lowest rates are not available to a huge segment of the population.

“Criteria is now a much bigger influence and people can be excluded due to very mainstream factors such as maintenance payments that haven’t gone through the courts, being on a zero hours contract or being self-employed.”

PRIMIS and PTFS proposition director Vikki Jefferies agrees, saying: “I’d like to see the study reference a focus on creating efficiencies within intermediated advice, rather than customers self-serving and focusing purely on price, which is not always the right outcome.”

Mortgage Advice Bureau managing director Ben Thompson says: “If a customer lost a property in a contracts race and wasted thousands of pounds in the process, one could rightly argue that £550 extra would have been well spent, if that enabled a speedier mortgage offer to be issued and the property to be secured first time.”

Mortgage Intelligence managing director Sally Laker says: “I hope that the final report will ensure that the customer is kept at the heart of future changes. Pricing is without doubt a key factor and customers will expect a good rate, however we shouldn’t lose sight of the importance of advice and providing the most suitable product for the customer.

“In today’s world, people’s lives are often very complicated, which may exclude them from certain products and low rates.”

Jefferies believes the role of technology in the sector will make an appearance in the study.

“Sourcing systems are delivering greater detail and developing APIs are supporting this pace of change, so I would expect the FCA mortgage market study to explore the impact of such rapid technological advancements within the sector,” she says.

“While this innovation certainly helps customers to make effective decisions, I still believe the human element of a mortgage process makes the real difference.”

The FCA has identified mortgage prisoners, shopping around and a broker comparison service as areas of the market to be addressed.

Just Mortgages and Spicerhaart operations director John Phillips says: “The [interim] report brings up mortgage prisoners. It specifically focuses on those who are stuck on reversion rates, but due to stricter affordability criteria, are unable to move to a cheaper deal. I am pleased the FCA is going to address this.”


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