Estate agents who introduce customers to in-house or third party mortgage brokers are to be investigated by the Financial Conduct Authority (FCA) as part of a new wide-ranging look at competition in the home loans market.
The aim of the review is to see if customers are being offered the best deals, advice and whether links between industry players limit choice, all part of a wider government drive to reduce the cost of buying a home.
There are currently 11.1 million home loans held in the UK worth £1.3 trillion, according to the Council of Mortgage Lenders.
“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,” said Christopher Woolard, the FCA’s executive director of strategy and competition (pictured).
This will include a close look at how estate agents, conveyancers, surveyors and developers all introduce customers to mortgage lenders or brokers.
But when launching the full review the FCA singled out estate agents for criticism, saying that some customers could be coming under pressure from estate agents to use certain brokers if they want to view or secure a property.
“We are interested in exploring the incentives estate agents have to refer consumers to use their in-house broker and whether this leads to worse outcomes for consumers,” the FCA said.
The review will not cover buy-to-let or commercial loans. The results of the survey along with any preliminary recommendations will be published next summer followed in January 2018 by a final report.
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