Flexible lending measures should go hand-in-hand with quality advice, industry body tells regulator
Flexible lending rules should only be introduced alongside continued access to high-quality professional advice, the Intermediary Mortgage Lenders Association (IMLA) said.
The industry group warned that any move towards regulatory flexibility must not compromise consumer protection or diminish the central role of impartial guidance for borrowers. IMLA’s comments came as the Financial Conduct Authority (FCA) concluded its consultation on the future of the UK mortgage market on Friday.
Among the key points in IMLA’s submission, the association highlighted the importance of advice, noting that most mortgages in the UK are arranged through intermediaries. IMLA argued that any simplification of rules should not reduce consumers’ access to professional guidance, and urged the FCA to continue supporting advice-led processes to help borrowers make informed decisions.
The lender association also called on both the regulator and the government to address the persistent shortage of suitable homes, which it identified as the main obstacle to first-time buyers.
IMLA also stressed that increasing the supply of affordable homes is essential to support first-time buyers, and that changes to affordability criteria alone will not be sufficient. The group does not back regulatory intervention to promote long-term fixed rate mortgages, citing limited consumer demand and the unsuitability of current funding models in the UK.
On affordability reform, IMLA said it supports pragmatic updates to stress-testing and prefers allowing lenders discretion over centralised stress rates. The association also supports the inclusion of rent-payment histories as part of a wider affordability assessment.
IMLA also welcomed recent adjustments to loan-to-income (LTI) limits for first-time buyers, but said further changes should be based on risk evidence and lender judgement. For later-life lending, IMLA believes the focus should be on ensuring access to qualified advisers rather than introducing new rules.
The association also noted that barriers to Shared Ownership are mainly due to administrative processes rather than regulation, and that regulatory intervention is unlikely to increase uptake. On energy efficiency, IMLA argued that any new measures should apply fairly across all property types and that lenders should not be held responsible for the energy performance of mortgaged properties.
The group said it supports the use of artificial intelligence to streamline processes, but maintains that technology should complement, not replace, professional advice. The association also questioned the need for an additional level of ‘enhanced’ advice for certain groups, warning that this could add unnecessary complexity.
“We cautiously welcome proportionate, evidence-led steps that could help more people into homeownership where they genuinely improve outcomes,” said Kate Davies (pictured top), executive director of the Intermediary Mortgage Lenders Association. “But professional mortgage advice is non-negotiable. Intermediaries are central to helping consumers navigate choice, risk and affordability.
“The UK mortgage market is broadly working well for a wide range of customers and does not need root-and-branch reform. Any changes should be measured, carefully staged and developed in close consultation with industry so we widen access without undermining standards.”
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