The Financial Conduct Authority has announced plans to help first-time buyers and the self-employed get a step-up onto the housing ladder.
Its reforms to the mortgage market also include helping homeowners unlock housing wealth for a more comfortable later life.
As part of its plans, the FCA will simplify mortgage rules to allow more flexible products that reflect different working patterns and income levels at different stages of life.
For later-life lending, the watchdog said it will review retirement interest-only requirements to make them more accessible. It will also explore ways to improve advice to help people confidently plan for later life.
In addition, the FCA will also focus on innovation and disclosure. It wants to encourage the use of data and technology, such as AI, and look at ways to make advertising and disclosure rules simpler so consumers can understand information online more easily.
Finally, the regulator said it plans to work with partners to support people affected by financial abuse and help those using a mortgage to manage or consolidate debt as part of its work to protect vulnerable consumers.
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 on the proposed rule changes from early 2026, with the aim of having the first rule changes in place later that year.
It 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, considering how the FCA can support the market to adapt and innovate so consumers can access fair value products that meet their needs.
Damien Burke, head of regulatory practice at Broadstone, welcomed the announcement: “The FCA’s mortgage market review signals a clear shift towards a more risk-sensitive and data-driven approach, moving away from blunt affordability rules towards assessments that better reflect real borrower behaviour and lifetime income patterns.
“Greater flexibility for first-time buyers, the self-employed and later-life borrowers can widen access without weakening standards, provided lenders continue to anchor decisions in robust credit risk modelling and stress testing. The challenge now will be ensuring innovation and AI-enabled advice enhance risk insight and consumer outcomes, rather than simply increasing complexity or mispricing risk.”
