The UK Financial Conduct Authority (FCA) has published feedback statement FS25/6 setting out its response to feedback received to its June discussion paper on the future of the mortgage market, and action the FCA will take as part of a longer‑term plan to modernise its mortgage rules.
The FCA plans targeted reforms across four key themes:
- Expanding access for first-time buyers and underserved consumers: The FCA will consult (with the UK Prudential Regulation Authority) on loan-to-income (LTI) ratio requirements in Q1 2026. It will also consult on responsible lending rules in 2026.
- Enhancing later-life lending: The FCA will review retirement interest-only requirements to enhance accessibility, explore ways to improve advice to help people confidently plan for later life, and conduct a focused market study to ensure the lifetime mortgage market can meet the changing needs of future customers.
- Enabling innovation: The FCA will continue to support innovation and adoption of new technology through its innovation services, including its Open Finance Tech Sprint, its Supercharged Sandbox and its AI live testing. It also wants to explore changes to disclosure and financial promotion rules to support innovation and smoother digital journeys. It will do this as part of its consumer duty review.
- Protecting vulnerable consumers: The FCA will work with partners to support people affected by financial abuse and help those using a mortgage to manage or consolidate debt.
The FCA intends to bring forward proposals supporting first-time buyers and underserved groups in 2026. In other areas, further work is needed to address challenges such as delivering more holistic advice for later-life financial planning. Policy development across all themes will commence by the end of 2026 continuing through 2027 as required, alongside developments to integrate open finance, AI-assisted advice, and improved disclosure standards under the consumer duty. Proposals to update the FCA's mortgage standards as part of wider, cross‑cutting policy initiatives may also take place during this period.
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