The Financial Conduct Authority will examine the commercial arrangements brokers have with other businesses, Christopher Woolard has said.
The regulator’s executive director for strategy and competition has said the review will be part of a study looking at the impact of the Mortgage Market Review.
But speaking at Imperial College Business School last night he said wholesale change would be unlikely.
He said: “The relationships between brokers, lenders, panels, price comparison websites - even some estate agents and builders - exist for a reason. For many, it is the management of commercial or regulatory risk.
“However, some of these relationships may be detrimental to the overall good-functioning of the mortgage market, or to the interests of consumers. We want to understand in more detail the competition dynamics in this space.
“More broadly, we intend to use the study as a means of reviewing the impact of the MMR as a whole. I should say now we do not envisage wholesale change.
“The market has told us pretty clearly they have managed the changes and would not like more, and as I said earlier we are seeing improved outcomes.
“But we will look at whether there is room for improvement and adjustment, it would be surprising if any regulator had got every single detail of a policy as significant as the MMR right first time.”
Mr Woolard also said the FCA has seen a large increase in the proportion of intermediated mortgages.
Intermediated mortgages sales, which had decreased to around 50 per cent in 2009/10, had increased to 67 per cent of the number of sales in the second quarter of 2016, he said.
Mr Woolard said: “To what extent is this increase caused by the MMR’s rules on advice? It’s not wholly clear to us, and that’s one of the questions we are considering.
“But the key issue in this area is to what extent there are differences in the outcomes for consumers who obtain their mortgages through a broker versus those who go direct to a lender.
“We intend to seek out what drives those differences, and consider if there is room for improvement.”
One of the issues the FCA is looking at is the extent to which consumers focus on the short-term price elements of their mortgages and are excessively optimistic about their future prospects.
He said: “The question we do want to consider in the market study is whether the tools available to consumers to help them make decisions effectively meet their needs.
“There are of course already many tools to help consumers shop around – brokers, price comparison websites, apps etc.
“These should assist consumers in searching for the most suitable product for their needs, but we want to consider whether there may be any distortions caused by an undue focus on certain headline charges or features.”
