Review targets barriers to home ownership amid shifting borrower demographics
The Financial Conduct Authority (FCA) continues to review mortgage lending rules in an effort to improve access to home ownership, especially for first-time buyers, the self-employed, and older borrowers.
The regulator has released a discussion paper as part of its broader work to help consumers make better financial decisions and to support long-term economic growth. The paper outlines potential changes aimed at improving flexibility in the mortgage market and making borrowing more accessible.
Key areas under review include updating responsible lending rules, addressing the growing need for later-life lending, enhancing consumer understanding, and encouraging innovation in lending practices.
“We want to evolve our mortgage rules to help more people access sustainable home ownership,” said David Geale, executive director for payments and digital Finance at the Financial Conduct Authority. “Having achieved higher standards in the market, now is the time to consider allowing more flexibility in a trusted market.
“Changing our mortgage rules could make it easier for people to get onto the property ladder and manage mortgages into retirement.
“We can’t solve all the issues related to home ownership. But we’re playing our part in helping people better use the mortgage market to navigate their financial lives and to encourage a dynamic, innovative and competitive market.”
Recent trends show more borrowers taking out longer-term mortgages. In 2024, 68% of first-time buyers opted for loan terms of 30 years or more, according to FCA figures. In addition, more homeowners are expected to rely on their housing equity in retirement, highlighting the need for an adaptable lending framework.
The regulator also cited findings from its Financial Lives 2024 survey, which show renters are more likely to face health issues and financial vulnerability than homeowners, as rising rental costs and reduced security continue to impact household stability.
While the UK mortgage market remains stable, with lenders showing improved conduct and low default rates, the FCA says further reform may support both individual borrowers and broader economic objectives.
The review forms part of the regulator’s wider strategy to improve consumer outcomes and encourage growth, with the proposals previously mentioned in correspondence with the Prime Minister.
The FCA has already engaged with lenders on how they can apply existing flexibility in affordability checks to help more people qualify for mortgages. However, the regulator acknowledges that wider housing issues — including supply, policy and economic conditions — also influence affordability.
Stakeholders are invited to submit feedback on the discussion paper by September 19. Any formal rule changes will follow further consultation and an assessment of market risks and consumer protections.
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