Editor's note: This brief was summarised by The Property AI Newsroom from a report by Property Industry Eye. Read the original article for full details.

FCA Proposes Mortgage Rule Changes to Improve Borrower Access

The Financial Conduct Authority (FCA) has announced proposed changes to mortgage lending rules aimed at widening access to borrowing for first-time buyers, self-employed workers, and older homeowners. The regulator has opened a consultation on these reforms, which will run until 28 July 2026.

The FCA stated that the proposed changes are designed to give lenders greater flexibility in assessing affordability and in designing mortgage products that better reflect individual borrowers’ circumstances, while maintaining existing consumer protections. Among the proposals are measures to make it easier for lenders to consider applicants with variable incomes, such as the self-employed, and those paid in foreign currencies.

The regulator also wants lenders to take a broader approach to affordability assessments, rather than automatically excluding borrowers due to minor or historic credit issues. Updates to rules covering retirement interest-only and interest-only mortgages have also been proposed, which the FCA says could provide older homeowners with more flexibility when accessing housing wealth or arranging borrowing later in life.

These proposals are part of the FCA’s wider programme of mortgage market reform, first outlined in December 2025, which aims to ensure lending rules better reflect the needs of today’s borrowers. The FCA said the changes would build on existing consumer protections, including the Consumer Duty, while giving lenders more flexibility to assess risk and serve a wider range of customers.

As part of the consultation, the FCA is seeking feedback from consumers, lenders, and other stakeholders. An online tool has also been launched to gather evidence directly from borrowers about their experiences in the mortgage market. After the consultation closes in July 2026, the FCA will consider the responses before deciding whether to implement the proposed changes.

These developments may be of interest to UK letting agents and inventory clerks, as changes to mortgage accessibility could impact the rental and sales markets, particularly for first-time buyers and older homeowners.