The FCA has outlined a package of reforms aimed at reshaping the UK mortgage market, with a particular focus on improving access for first-time buyers, the self-employed and other underserved groups.
The proposals are also designed to help homeowners make better use of property wealth later in life, while encouraging innovation and strengthening protections for vulnerable consumers.
At the centre of the FCA’s plans is a recognition that traditional mortgage rules no longer reflect modern working patterns or changing life stages. For first-time buyers and consumers with non-standard incomes, the regulator intends to simplify mortgage requirements so lenders can offer more flexible products. These reforms are intended to better account for fluctuating earnings and varied employment models, which have become increasingly common across the UK workforce.
Later-life lending is another major priority. The FCA plans to review requirements around retirement interest-only mortgages to make them more accessible, while also exploring how advice can be improved to help consumers plan more confidently for later life. Alongside this, the regulator will launch a focused market study into the lifetime mortgage sector, assessing whether the market is equipped to meet the evolving needs of future customers and deliver fair value outcomes.
Innovation and disclosure also feature prominently in the FCA’s roadmap. The regulator is encouraging greater use of data and technology, including AI, to help mortgage brokers deliver faster and more effective advice without losing the human element. In parallel, it will look at simplifying advertising and disclosure rules so consumers can more easily understand mortgage information online and make informed decisions.
Protecting vulnerable consumers remains a key theme, with the FCA committing to work with industry partners to support people affected by financial abuse and those using mortgages to manage or consolidate debt. These efforts are intended to ensure that increased flexibility in the market does not come at the expense of consumer protection.
Commenting on the proposals, the FCA executive director for payments and digital finance David Geale 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 begin consulting on proposed rule changes across the four priority areas from early 2026, with the first reforms expected to come into force later that year. Terms of reference for the later-life lending market study will be published in the first quarter of next year.
The regulator also highlighted recent progress in the market. In March 2025, it reminded firms about flexibility in interest rate stress tests, prompting lenders to widen borrowing options and offer around £30,000 more to many borrowers. Despite higher interest rates and living costs, 99% of mortgages taken out since 2014 are not in arrears, underscoring the resilience of current lending standards.
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