The FCA’s review has the potential to support buyer demand by widening access to mortgage finance over time. Clearer and more flexible lending practices could help reduce failed transactions linked to mortgage refusals. Targeted proposals for first-time buyers and underserved consumers will be brought forward in 2026.
Propertymark has consistently called for reforms that improve access to home ownership while maintaining strong consumer protections. We will continue to monitor the FCA’s work closely and engage with policymakers to ensure the practical realities of the housing market are understood.
Why the FCA is reviewing mortgage rules
The FCA has acknowledged that the mortgage market has changed significantly since many of the current rules were introduced after the global financial crisis. While these rules have helped protect borrowers and maintain financial stability, the regulator believes some aspects may now be overly restrictive or applied inconsistently.
The review will not weaken consumer protections. Instead, the FCA has been clear that its objective is to clarify and modernise rules so lenders can exercise judgement with confidence, without fear of regulatory repercussions where outcomes for consumers are good.
What the FCA is aiming to achieve
The intended outcomes of the review are clear:
- More consistent and proportionate application of mortgage rules across the market.
- Greater confidence among lenders to support borrowers who fall outside traditional profiles.
- Improved access to home ownership, particularly for first-time buyers.
- Continued high standards of consumer protection and market stability.
Importantly, the FCA has stressed that this is not about encouraging risky lending or a return to pre-crisis practices. Instead, it is about ensuring the rules work as intended and support good outcomes for both consumers and the wider economy.
Affordability and lender discretion
While affordability assessments and interest rate stress testing are essential, lenders may be taking an overly cautious approach, going beyond what the rules require.
The FCA wants to ensure firms have the right guidance to use their judgement more effectively, and are confident lending to borrowers with non-standard circumstances, such as the self-employed or those with fluctuating incomes, where this can be done responsibly.
To support this, the review will consider amending rules on high loan-to-value lending, credible repayment strategies (for example, interest-only, part-and-part, and ‘low start’ mortgages), and recognising rental payment history in affordability assessments.
Later life and longer-term lending
Reviewers will also consider how mortgage rules apply to older borrowers and longer mortgage terms. With people working for longer and buying later in life, the framework must reflect modern borrowing patterns and avoid creating unnecessary barriers.
