First-time buyers and the self-employed could get a step-up onto
the housing ladder, under new plans from the FCA.
Its priorities for reforms to the mortgage market also include
helping homeowners unlock housing wealth for a more comfortable
later life.
The FCA will focus on 4 areas:
-
First-time buyers & underserved
consumers: Simplifying mortgage rules to allow
more flexible products that reflect different working patterns
and income levels at different stages of life.
-
Later-life lending: Reviewing retirement
interest-only requirements to make them more accessible.
Exploring ways to improve advice to help people confidently
plan for later life. Conducting a focused market study to
ensure the lifetime mortgage market can meet the changing needs
of future customers.
-
Innovation & disclosure: Encouraging
the use of data and technology, such as AI, to help brokers
give better and faster advice while keeping a human touch.
Looking at ways to make advertising and disclosure rules
simpler, so consumers can understand information online more
easily.
-
Protecting vulnerable consumers: Working
with partners to support people affected by financial abuse and
help those using a mortgage to manage or consolidate debt.
David Geale, executive director for payments and digital finance,
said:
"We have worked at pace this year to improve outcomes for
customers wanting a mortgage. We'll use insight from consumers
and industry to drive further reforms and rebalance risk –
helping to widen access to affordable mortgages to meet the needs
of consumers today.
"Reforming the mortgage market can help address the fact that as
a society we're saving too little for later life, yet people have
huge wealth tied up in property."
The FCA will start to consult the public on proposed rule changes
in the four areas from early 2026 and aim to have the first rule
changes in place later that year.
The FCA will also launch a focused market study to consider how
the later life lending market could develop to meet the different
needs of future consumers. The market study will be
forward-looking and consider how the FCA can support the market
to adapt and innovate, so consumers can access fair value
products that meet their needs. Terms of reference will be
published in the first quarter of next year.
In March 2025, the FCA reminded firms about flexibility in
interest rate stress tests. The industry acted, widening
borrowing options and easing affordability pressures, and is able
to offer around £30,000 more to many borrowers.
Despite the rise of interest rates and living costs, 99% of
mortgages taken out since 2014, when mortgage standards were
tightened, are not in arrears.
Notes to editors
-
Mortgage Rule Review Feedback
statement and Roadmap for 2026.
- The FCA's 5-year
strategy published earlier this year, aims to deepen
trust, rebalance risk, support growth and improve lives. As part
of this work, the FCA is reviewing mortgage rules to consider how
to update its mortgage framework to support consumers in
accessing the market.
- Earlier in the year we reminded lenders of the
flexibility in our stress testing rules. We've seen several
lenders react to this, helping more customers to access
mortgages.
- We then consulted and published final
rules in July making it easier, faster and cheaper to
make certain changes to your mortgage and improve choice in the
market. We also retired outdated handbook guidance.
- Following FPC recommendations, we worked with the PRA to
allow individual lenders to lend beyond the 15% LTI flow limit.
- The consultations will look for views on next steps in the
roadmap. Some involve making balanced choices – for example,
people taking on more risk or exploring new ways to engage with
the market. Firms need to monitor this and maintain strong
standards of conduct.
- FCA CEO gave a speech on the future of
the mortgage market at the L&G Mortgage Club.
