Press release

The BSA comments on FCA Mortgage Market Study

MMS-FCA.pngCommenting on the findings of the Mortgage Market Study, published today by FCA, Paul Broadhead, Head of Mortgage Policy at the BSA said:

“It is positive to see the FCA recognise that there are high levels of customer engagement in the mortgage market and that the commercial relationships between lenders and mortgage brokers broadly work. Although the study focuses on increasing consumer choice early in the process there appears to be a lack of consistency in the approach from price comparison websites. Customers are increasingly using these sites as a first port of call and it is important that they understand the breadth of the market that is covered and also the differences in how these listings are paid for – we believe that work is needed to make this more transparent. Price is one important, but not the only factor in choosing a mortgage. Mortgage brokers play a key role in identifying a number of factors that are important to a borrower before making a recommendation. It is key that borrowers fully understand the services that intermediaries offer, and the breadth of the market they cover. A broker comparison tool could be a viable solution, but to make such a tool fit for purpose, and simple to navigate for consumers, further work and analysis is required.

“Our biggest concern is the number of borrowers that are unable to switch their mortgage once it is sold to a non-active, often unregulated entity. We are confident that building societies are making use of the transitional arrangements set out by the regulator to help their borrowers. There are many reasons for borrowers to remain on their reversion rate, such as plans to move home or because the rate is cheap. Nevertheless, the BSA will continue to work with FCA on their proposal for an industry-wide agreement for an internal switch for all customers meeting certain criteria.

“Ultimately, the mortgage market is a highly competitive environment which is working in favour of borrowers, with record low mortgage rates. Building Societies provide real competition in the market by offering niche mortgages alongside standard products. First-time buyers, the retired, the self-employed or those with more complex needs will find a mortgage to suit them at a building society.

“While the market does work well for the majority of borrowers it is important that the industry adapts to evolving customer needs, including through the use of technology.”



Amy McCluskey

Press and Publications Officer

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