The Financial Conduct Authority (FCA) is exploring whether current mortgage rules need to evolve to reflect changes in modern UK society, particularly when it comes to supporting older buyers, the self-employed, and reliable long-term renters.
Over the past decade, the way people in the UK live, work, and retire has shifted significantly. At the same time, house prices have risen faster than wages, making it more difficult for many to access affordable home ownership.
But while the UK property market has changed dramatically, many wonder whether the mortgage rules governing borrowing have kept pace. The FCA, responsible for regulating the mortgage market, has launched a wide-ranging review to explore this issue.
FCA Launches Mortgage Review
As part of its review, the FCA is inviting public feedback via an online survey (closing 19 September), which includes 37 questions covering a range of topics, including:
- Should lifetime mortgages be more accessible?
- What would make mortgages more attainable for the self-employed?
- Should the mortgage stress test be revised?
This consultation aims to determine if new, more flexible mortgage options are needed to better serve the evolving needs of UK borrowers.
The Groups Most Affected
Certain groups often find themselves at a disadvantage under current mortgage rules:
Self-employed borrowers: With over 4.4 million people in the UK working for themselves, it’s no surprise that this group often struggles to meet lender criteria, especially when buying solo without a co-borrower on a salaried income. Despite having steady revenue, they can find it difficult to prove affordability.
Older first-time buyers: With many people climbing the housing ladder later in life due to rising property prices, older buyers face shorter loan terms due to their age. This can result in higher monthly repayments, pushing affordability beyond reach.
Reliable renters: Some long-term tenants can afford mortgage repayments and have spotless rental histories, yet saving for a deposit remains a barrier. For them, the system feels stacked against their chances of buying, despite demonstrating financial reliability.
Finding the Right Balance
Of course, stricter mortgage rules exist for a reason: to avoid irresponsible lending and protect both borrowers and the wider economy. Lessons from the 2008 financial crisis remain firmly in the minds of policymakers.
The FCA states:
“We want a well-functioning mortgage market where all borrowers who can afford to repay can access the mortgages they need. This means enabling firms to offer products which are better tailored to consumers’ needs, while continuing to help ensure a sustainable market which maintains the core lessons from the 2008 crisis.”
So while reform may be needed, any adjustments to mortgage rules must be measured and responsible.
Have Your Say
If you’re affected by these challenges or have a view on how the UK mortgage market could better support modern borrowers, now is the time to contribute. You can complete the FCA’s consultation here:
https://tinyurl.com/4a8bdjss
And if you’re a first-time buyer looking to navigate the system and get a foot on the ladder, feel free to contact our team for expert guidance.
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