FINANCIAL watchdog is looking at changing mortgage rules to help more people buy homes, particularly first-time buyers, self-employed workers and those borrowing into retirement.
The Financial Conduct Authority (FCA) has launched a public discussion on the future of the mortgage market as part of efforts to support economic growth and help consumers manage their money.
Under the proposals, lending rules would be updated to make home ownership more accessible while keeping borrowing sustainable, a statement said. Plans also include preparing the market for increased demand from older borrowers and introducing more flexibility to help consumers understand their options.
David Geale, executive director for Payments and Digital Finance, said the FCA wants to help more people access sustainable home ownership. He said that after achieving higher standards in the market, it is time to allow more flexibility in what he called a trusted market.
"Changing our mortgage rules could make it easier for people to get onto the property ladder and manage mortgages into retirement," Geale said. He added that whilst the FCA cannot solve all home ownership issues, it wants to help people better use the mortgage market.
Britain's mortgage market has changed significantly in recent years. First-time buyers are now older and borrowing for longer periods, including into retirement. FCA data shows that in 2024, 68 per cent of first-time buyers took mortgages lasting 30 years or more.
Buying a home has become harder to achieve for many people, with more choosing to rent for longer periods. Renters face higher housing costs and less security than homeowners.
According to the FCA's Financial Lives 2024 survey, renters are more likely to be vulnerable and have poor health compared to other UK adults.
Regulators said the mortgage market remains strong, and there have been improvements in how lenders behave and default rates stay low. Authorities have already spoken to firms about flexibility when checking if someone can afford a mortgage, helping more borrowers get loans.
This review forms part of the FCA's new strategy to help consumers navigate their financial lives and support growth. Measures were also included in a letter to the prime minister detailing changes to boost economic growth.
Meanwhile, FCA acknowledged that many factors affect home ownership, including housing supply, social policy and economic conditions. Officials said changes to rules are only part of the solution and they will work with others to support access to home ownership.
Public feedback on the discussion paper closes on September 19.
