First-time buyers, the self-employed and later-life lenders could get a step-up onto the housing ladder under plans announced by the Financial Conduct Authority (FCA) this week.
The regulator has shared its priorities for reforms to the mortgage market in its Mortgage Rule Review Feedback statement and Roadmap for 2026, which sets out how it plans to expand access to financial products for home buyers.
The FCA says it will focus on four areas to improve access to lending for consumers: first-time buyers and under-served customers, later-life lending, innovation and disclosure, and the protection of vulnerable customers.
First-time buyers and under-served customers will benefit from simplified mortgage rules that reflect different working patterns and income levels at different stages of life, the FCA said. Retirement interest-only requirements will be reviewed to make them more accessible for later-life lenders, with the FCA exploring ways to improve advice to help people “confidently plan for later life.”
The use of data and technology will be enocuraged to help brokers give better and faster advice, and the FCA will work with partners to better support vulnerable customers who may be affected by financial abuse, and to help those using a mortgage to manage or consolidate debt.
David Geale, executive director for payments and digital finance at the FCA, 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 said it will start to consult the public on proposed rule changes in the four areas from early 2026 and aims to have the first rule changes in place later that year.
A focused market study will also be launched to consider how the later life lending market could develop to meet the different needs of future consumers. The market study will be forward-looking and will consider how the FCA can support the market to adapt and innovate, so consumers can access fair value products that meet their needs. Terms of reference will be published in the first quarter of next year.
In March this year, the FCA reminded firms about flexibility in interest rate stress tests. In response, the industry widened borrowing options and eased affordability pressures to offer around £30,000 more to many borrowers. Despite the rise of interest rates and living costs, 99% of mortgages taken out since 2014, when mortgage standards were tightened, are not in arrears.
Robin Rouwenhors, mortgage policy manager at the Building Societies Association, said the FCA had “clearly listened” to BSA members. He explained:
“We have consistently highlighted the need for a broader perspective when comparing the customer outcomes of homeowners with those remaining in rental accommodation and therefore welcome the focus on targeted reforms to support first-time buyers and the self-employed to make it easier to get a mortgage, including exploring ‘part and part’ interest-only mortgages.
“As people live and work longer, the mortgage market must evolve to support borrowing into retirement. The regulator’s planned review of retirement interest only mortgages is therefore a welcome step forward to a functioning mortgage market for older borrowers.”
Dave Harris, CEO of later life lender more2life, said the plans show the FCA is moving “from discussion to direction.” He added:
“Most importantly, the feedback recognises that the role of property wealth is changing. It is no longer a last resort and is increasingly becoming part of mainstream later life planning, something we have been clear about for some time.”
The Equity Release Council said it also welcomes the FCA’s roadmap in recognising later life lending as central to UK financial resilience. Chair David Burrowes commented:
“The FCA’s acknowledgement that housing wealth will play an increasingly important role in later life financial wellbeing is both timely and necessary. For many older homeowners, later life lending is no longer a niche option, but a practical and responsible way to support retirement income, manage debt, or remain in their own homes for longer.”
He added:
“We strongly welcome the FCA’s commitment to a focused market study on later life lending. This presents an opportunity to ensure the market continues to evolve in a way that delivers good outcomes, fair value and consumer confidence, while supporting innovation and choice.”
Mary-Lou Press, president of NAEA Propertymark (National Association of Estate Agents), said the roadmap is a welcome recognition that the mortgage market must better reflect modern working lives and changing borrower needs.
She added:
“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.
“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. The fact that the vast majority of mortgages remain out of arrears shows the current system is fundamentally sound, but also that there is room to carefully widen access without increasing risk.
“As affordability pressures ease and lenders adapt following changes to stress testing, reforms should be introduced in a measured way, alongside clear advice and transparency. Ensuring consumers fully understand their options, particularly around interest-only, part-repayment and later life lending, will be key to supporting sustainable home ownership both now and in the future.”
FCA Mortgage Rule Review Feedback statement and Roadmap for 2026.
