UK watchdog to review competition in mortgage market

Britain’s financial watchdog has launched a full review of the country’s £1.3 trillion (€1.5 trillion) mortgage market to see if customers could get better deals and whether links between industry players limit choice.

The Financial Conduct Authority (FCA) originally started looking at mortgages in October 2015 to see if there were parts of the market where competition could be improved.

The full review, announced on Monday, comes as the British government is under pressure over a housing shortage and the high cost of buying a house, which has put home ownership out of reach for many people.

“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,” Christopher Woolard, the FCA’s executive director of strategy and competition, said.

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The market is made up of 11.1 million home loans totalling £1.3 trillion, of which £220 billion was borrowed in 2015, according to the Council of Mortgage Lenders, an industry body.

The watchdog’s review will focus on residential mortgages, the process of switching products with the same provider and remortgaging with a new one. It will not look directly at commercial or buy-to-let loans.

It will also look at relationships between lenders, brokers, price comparison websites and other services such as estate agents, surveyors and conveyancers to see if they affect competition in the mortgage sector, the FCA said.

Reuters