The Financial Conduct Authority (FCA) released its Mortgage Market Study last Friday, the results of which they have stated are ‘reassuring’.
With mortgage debt accounting for over 80% of total UK household liabilities, ensuring that you have the right mortgage to suit your situation is imperative.
The FCA has stated within the report their vision for the market, informing that it is one in which “borrowers who can afford a mortgage can choose suitable and good value products and services, firms have a culture of treating all consumers fairly, and competition and proportionate regulation empower consumers to make effective choices before taking out, and throughout the life of, a mortgage”.
It is promising to see such a declaration of interest in fairness within the market, and hopefully such ideals will be of further influence to other professionals.
The findings recorded within the report include the following:
- There are about eight million regulated, first-charge residential mortgages. These are worth at least £1 trillion, amounting to one of the largest retail financial markets.
- 2016 saw 1.9 million mortgage transactions, including around 80% that were advised and 50% that were arranged by an intermediary.
- Overall, they found a mortgage market that is working well, but has fallen short of their vision in certain ways.
The FCA has pointed out that “the picture is complex”, and the report goes on to discuss matters in more detail. The full report can be accessed here.
Ishaan Malhi, CEO and founder of Mortgage Broker Trussle, has commented: “It was a long wait, but it’s good to see the findings of the FCA’s Mortgage Market Study finally published. It couldn’t have come at a more crucial time, with so many home owners finding it difficult to compare deals, unnecessarily overpaying interest, or trapped on Standard Variable Rate deals.
“Trussle was borne out of the same frustrations and inefficiencies highlighted in today’s report. Since we began we’ve championed the use of technology to deliver a simple, intuitive, and convenient service to help consumers choose and switch to the most suitable and cost-effective deal. The industry as a whole has made baby steps towards embracing technology and innovation to educate and empower consumers in recent years, but I hope this report galvanizes everyone to do more.
“The inclusion of robust qualitative and quantitative insight supports many of the problems we identified and have been working hard to solve since we launched two years ago. We hope the industry stands up and takes notice of its shortcomings. Today’s home owners deserve a better mortgage experience and it’s clear to see the potential of technology in delivering that.”