Funding pressures in the mortgage market could trigger the return of aggressive dual pricing strategies, the FSA is warning.
The regulator has today published its retail conduct risk outlook, which analyses the main risks facing consumers and firms over the next 12 to 18 months.
The report says that mortgage intermediaries, and networks in particular, continue to face a number of market challenges.
It says: “Survey findings suggest that the persistent uncertainty in market conditions continues to have an impact on mortgage intermediaries. This reiterates concerns that developing and maintaining a sustainable and compliant business model will likely remain challenging for mortgage intermediaries, particularly for network models.”
It highlights dual pricing as a particular threat to brokers.
The report says: “At an aggregate level, mortgage intermediaries are challenged by competition from lenders’ direct sales with further funding pressures in the mortgage market potentially triggering a return of the aggressive dual pricing strategies seen in 2008 where lenders offered more competitive products via their branches.”