FCA Unveils Plan to Modernise the UK Mortgage Market

The UK’s financial regulator, the Financial Conduct Authority (FCA), published yesterday, December 15, that it has set out plans to help build the mortgage market of the future.

The announcement says that the new plans will allow first-time buyers and the self-employed to get a step up onto the housing ladder.

Four Areas That The FCA Will Focus On

The regulator has explained its priorities for reforms to the mortgage market, saying that they include helping homeowners unlock housing wealth for a more comfortable later life. Specifically, it plans to focus on four key areas – first-time buyers and underserved customers, later-life lending, innovation and disclosure, as well as protecting vulnerable customers.

Focusing on first-time buyers and underserved customers, the regulator aims to simplify mortgage rules in order to allow more flexible products that would reflect different working patterns and income levels at different stages of life.

Later-life lending will review interest-only requirements for retirees to make them more accessible. It will also explore ways to improve advice to help people confidently plan for later life.

The next key area, innovation and disclosure, revolves around encouraging the use of data and technology such as AI, aiming to help brokers give better and faster advice while maintaining a human touch. It will also look into ways to make advertising and disclosure rules simpler, so consumers can understand online information more easily.

Finally, it will focus on protecting vulnerable customers by working with partners to support people affected by financial abuse, and help those using a mortgage ot manage or consolidate debt.

Public Consultation To Start In Early 2026

Commenting on the matter, executive director for payments and digital finance, David Geale, 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.”

Geale also noted that reforming the mortgage market can help address the fact that society is saving too little for later life, while people have huge wealth tied up in property.

The FCA intends to start consulting the public on the proposed rule changes early next year, and if there are no strong objections, it will start implementing the first rule changes later in 2026.

Along the way, the regulator also plans to launch a focused market study to consider how the later life lending market could develop to meet the different needs of consumers in the future.