(Sharecast News) - The Financial Conduct Authority said on Monday that it was preparing reforms to make mortgage finance more accessible for first‑time buyers, self‑employed workers and older borrowers.
The City regulator said it wanted to create "the mortgage market of the future," reflecting changes in technology, employment and demographics. A consultation on proposed rule changes will begin in early 2026, with the first updates expected later that year.
The FCA said it was focusing on four areas - support for first‑time buyers and underserved customers, later life lending, protection for vulnerable borrowers, and innovation and disclosure. It will also launch a market study into later life lending in the first quarter of next year, noting that more people were expected to borrow beyond state pension age.
As part of its work, the regulator will consider simplifying rules to allow more flexible products that reflect varied income patterns, while encouraging the use of AI to improve mortgage advice. It will also look at making advertising and disclosure rules clearer, and supporting those affected by financial abuse or using mortgages to consolidate debt.
Feedback to its discussion paper showed "wide agreement" that some groups, including those without large deposits, family support, or with irregular income, could be better served. Respondents suggested part interest‑only and part repayment mortgages could help more buyers access homeownership, while "low start" products that convert to repayment later could suit customers with expected salary growth.
The FCA also highlighted innovation around rental payment data, which has been increasingly used to build credit profiles.
FCA's David Geale said: "We have worked at pace this year to improve outcomes for customers wanting a mortgage.
"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."
Reporting by Iain Gilbert at Sharecast.com