The Financial Conduct Authority plans to make mortgage lending simpler and more flexible in a raft of changes to be introduced next year.
16th Dec 20250 493 2 minutes read David Callaghan
New rules designed to help first-time buyers and retirees access mortgages are set to be introduced next year.
The Financial Conduct Authority (FCA) has confirmed earlier announced plans to simplify mortgage lending to make it more flexible and able to help people with “different working patterns and income levels”.
Ways that interest-only mortgages could be made available to people in their retirement years, will form a part of the plans.
Rule changesA public consultation will begin in early 2026 with the first rule changes in place later next year.
In May, the FCA unveiled a plan to scrap affordability checks for homeowners looking to remortgage, giving them access to potentially cheaper deals.
We’re saving too little for later life, yet people have huge wealth tied up in property.”
David Geale, Executive Director for Payments and Digital Finance, FCA
David Geale, Executive Director for Payments and Digital Finance at the FCA, says: “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.”
Industry reaction
Zara Bray, Mortgage Distribution Director, Quilter Financial Planning
Zara Bray, Mortgage Distribution Director at Quilter Financial Planning, says: “The FCA’s roadmap is ambitious and welcome, but can only work in parallel with a government committed to overcoming the UK’s deep-rooted housing challenges.
“Even with more flexible lending approaches, limited housing stock will continue to be a major brake on homeownership,” she says.
“These changes could make a real difference for people who have long demonstrated affordability through high rents but remain shut out of the mortgage market.”
This is a welcome recognition that the mortgage market must better reflect modern working lives.”
Mary-Lou Press, President, NAEA Propertymark
Mary-Lou Press, President of NAEA Propertymark, says: “This is a welcome recognition that the mortgage market must better reflect modern working lives and changing borrower needs.
“Greater flexibility for first-time buyers, the self-employed, and those with non-traditional or later-life income has the potential to unlock home ownership for groups who have historically been underserved,” she says.
“Moves to simplify rules, modernise affordability assessments and responsibly embrace innovation such as rental payment data and AI-driven advice, could make a meaningful difference, provided robust consumer protections remain in place.”
This should avoid people being swept into an ill suited mortgage category.”
Dominic Agace, CEO, Winkworth
Dominic Agace, CEO at Winkworth, says: “Reform is welcome. The technology is there for a more bespoke approach to mortgages to accommodate the growing self employed sector, an individual’s track record and the property they are buying.
“With better data available, this should avoid people being swept into an ill suited mortgage category, as a result of having to fit within certain categories,” he says.
Within capabilities“This has to be welcomed, allowing more people to borrow within their capabilities to achieve the properties they want with their family. It will also encourage more people to be entrepreneurial, knowing it won’t hold them back when buying property.
“I also welcome interest only mortgages being more available. With the right deposit in place and the right property, it is a useful tool and goes a long way to providing lender comfort while allowing an individual to be more efficient in how they invest their cash in the present rather than for the future, when, in reality, they will most likely sell the house to downsize rather than pay off the mortgage.”
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Tagsmortgages 16th Dec 20250 493 2 minutes read David Callaghan Share Facebook X LinkedIn Share via Email
