The UK’s Financial Conduct Authority (FCA) has today published the Final report in its Mortgages market study.

The report sets out the FCA’s final view of competition in the market that it started investigating in 2015.

The FCA has confirmed the findings from its Interim report: the market is generally working well with high levels of consumer engagement and a wide range of products on offer.  In order to improve the outcomes in the market further, the FCA is proposing to make it easier for customers to choose the right mortgage and mortgage broker and to make it easier for customers to switch between lenders.  

While switching is generally high in the market, the FCA has identified a minority of customers who may be suffering harm because they do not switch their mortgage. 70% of these customers have been on a relatively high mortgage interest rate for more than 5 years.

The FCA has promised to undertake more research to understand the characteristics of customers who do not switch and develop remedies. This will be an important piece of work as the impact on many customers is potentially significant. It also links closely to the recent super-complaint from Citizen's Advice that raised concerns about long-standing customers paying higher prices in several markets, including mortgages. The FCA will have to think carefully about how it will go about getting a response from some potentially hard to engage customers.

Frontier advised Lloyds Banking Group in relation to the FCA’s market study.