FCA Mortgages Market Study Interim Report 'not watering down MMR', says FSE Wales panel
27 June 2018
A panel of mortgage experts taking part in a residential mortgage debate at today’s FSE Wales exhibition has agreed that the FCA is not trying to ‘water down’ the Mortgage Market Review, particularly its pro-advice parts.
Highlighting the positives within the Interim Report including the “high level of consumer engagement’ with the mortgage advice process, Liz Syms of Connect for Intermediaries, said: “I think it’s good to look at MMR again, for example, the number of mortgage prisoners we have in the market should be looked at. The way MMR was implemented has caused some mortgage prisoners who are stuck on higher rates. It shouldn’t water down MMR for advisers.”
Paul Weatherhogg of Metro Bank agreed: “I’ve read words like ‘softening’ and ‘watering down’ when it comes to a discussion about the Interim Report and MMR, and I don’t believe that’s the case. I see this as a continuous debate and ongoing engagement between the industry and the FCA and we will move on from here. I think the report said that 70% of all mortgages are placed via intermediaries, so if anything the MMR has shown the true value of advice.”
There was however some criticism for the Interim Report. Charlotte Grimshaw of Family Building Society was concerned by the focus on mortgage price and cost. “In my view it focused far too much on price,” she said. “The cheapest mortgage is not necessarily the best option for a borrower; criteria and affordability should definitely come into it. This should not just be about getting a high-street rate.”
Craig Flinter of Atom Bank agreed that “price is not the main driver” but also said: “I believe there is also a place for self-select/self-service/execution-only mortgages,” he said. “There will always be a place for advice but the consumer needs to have a choice.”
The panel also discussed one of the Interim Report’s major measures – a comparison site to allow consumers to compare the quality and service available from mortgage advice firms.
Weatherhogg was unconvinced about how such a comparison site would be put together and what metrics would be used. “The comparison tool I think is going to be very difficult to put together,” he said. “What metrics are going to be used to compare firms? What is the size of the lender panel? It’s a very difficult thing to measure – it will be all about getting the same measurements and making it fair for all. It seems like a nice idea but how we develop it, and how we flesh it out, I feel very uncomfortable with.”
Simon Read of Magellan Homeloans voiced similar concerns. “If it’s commercial, then it’s never impartial,” he said. “If it’s to be run by an industry body, that’s all well and good, but how’s it going to be paid for? Most intermediaries’ business comes from word of mouth and that’s the best way.”
FSE Wales provided visitors with access to over 40 of the industry’s biggest, best and brightest exhibitors including lenders – both mainstream and specialist, distributors, networks, insurance providers, technology companies, and many more.
Lenders attending FSE Wales included sponsors’ One Savings Bank and Metro Bank, plus Accord Mortgages, Barclays, Coventry Building Society, Family Building Society, Foundation, Kensington, Keystone, Magellan, Masthaven, Nationwide, NatWest, New Street, Paragon, Secure Trust Bank and The Mortgage Works.
If you are a member of the press and would like to attend future Financial Services Expo events please contact Rob Griffiths at White Dragon Communications on: rob@whitedragoncomms.co.uk or 07983 641566.
