This Feedback Statement reports on the themes arising from the responses to the Call for Inputs on competition in the mortgage sector and sets out our planned work. It forms part of our wider programme of mortgages work which also includes the Responsible Lending Review[1], which has been published alongside this Statement.
Why are we issuing this Feedback Statement?
Mortgages play a vital role in our economy. It is therefore important that competition in the mortgage sector works well and creates incentives for firms to operate as effectively and efficiently as possible. This will, in turn, deliver benefits for consumers in the form of lower prices, better products and choice, and more innovation.
In October 2015 we published a Call for Inputs[3], seeking views on any areas of the mortgage sector which might raise competition concerns meriting further investigation.
This Statement:
- sets out the key themes which have emerged from the CfI, explains why we consider these to be important, and provides a summary of the responses received
- outlines the further competition work we intend to undertake in the mortgage sector, having considered the key themes in light of our priorities and wider strategy
The responses to the CfI can be categorised into four main themes:
- Consumers face challenges in making effective choices, particularly when it comes to assessing and acting on information about mortgage products, with intermediaries being key to the process.
- There are opportunities to make more effective use of technology in the provision of information and advice.
- Commercial relationships between different players in the sector’s supply chain - in particular the use of panels - might give rise to competition concerns.
- Certain dimensions of the regulatory framework might have a negative impact on competition.
Who should read this Statement?
This Statement is aimed at organisations and individuals who are interested in how competition in the mortgage sector can generate good outcomes for consumers, firms and the market. These include mortgage market participants, including trade associations, firms and consumer representatives.
Next steps
Further to our commitment to work with industry to increase awareness of competition law, on 30 September 2016 we held a competition law workshop for members of the Council of Mortgage Lenders. The event included information on the our role as a concurrent competition law regulator and some basics of competition law.
Find our more information on our approach to promoting competition[4]. For guidance on the application of concurrent competition law powers see FG15/8 A guide to the FCA’s powers and procedures under the Competition Act 1998[5].
In December 2016 we launched our Mortgages Market Study[6].