In May the Financial Conduct Authority (FCA) published its Mortgage Market Study Interim Report, which found that, on the whole, the market is working well for the majority of consumers, but it also identified a number of ways in which it could work better.

Today we published our response to the Report, in which we welcomed its findings. At the same time, we also announced the launch of a voluntary industry agreement, which will allow eligible homeowners currently tied to reversion rate deals the opportunity to switch to another deal with their existing regulated lender.

This is just one of the steps being taken by the industry to ensure we can make the market more efficient for all consumers. We have also agreed to explore with members and the FCA ways in which we can aid mortgage customers of inactive and unregulated lenders, who are tied to uncompetitive mortgage deals.

The FCA report found that mortgage borrowers are highly engaged, with more than 75 per cent of borrowers moving their mortgage within six months of their deal period ending, as evidenced by our product transfer data published last week . Making it easier for consumers to find the right mortgage for them is a key priority for the FCA.

Currently around 70 per cent of customers do find the cheapest deal when selecting a mortgage - but this is not the only indicator of a suitable mortgage. Customer circumstances are ever more complex, and the mortgage market has responded to that but not everyone will be eligible for every mortgage. We would like to see further research into the non-monetary factors that influence consumers? decisions - for example, brand loyalty, their attitude to being tied in to a fixed rate, and their thoughts about how long they plan to stay in their home.

The fintech sector has launched - and is developing further - commercial solutions that will make it easier for intermediaries to compare mortgage products. Consumer-facing solutions are also on the cards and we would like to see these developments being allowed to continue before there is any regulatory intervention.

In our response we also recommend that there is further consideration of the provision of holistic financial advice to customers. People have different needs at different stages of their lives and a standard approach to regulated mortgage advice will not always be appropriate.
We would also like to see financial education on mortgage types being made a priority for the Single Financial Guidance Body.

The mortgage market has been through a massive amount of regulatory change in recent years, with the reforms following the Mortgage Market Review and the implementation of the Mortgage Credit Directive. Firms are now able to review their products and services to consumers and are bringing in innovative products to meet consumer demand. These include mortgages that are manually underwritten for more complex circumstances, the development of Retirement Interest Only mortgages and new products for self-employed borrowers and first-time buyers.

It is important that any proposed future regulatory changes consider carefully the impact they may have on the development of innovative products and services and the benefits of these to consumers, as more reforms could lead to resources being diverted away from these.