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

FCA Proposes Mortgage Rule Changes to Widen Borrower Access

The Financial Conduct Authority (FCA) has published proposals to reform mortgage lending rules in the UK. The changes are intended to expand access for first-time buyers, self-employed workers, and older borrowers.

The FCA stated that the proposed reforms would give lenders more flexibility in affordability assessments while maintaining consumer protections. The measures include helping lenders evaluate applicants with variable incomes, such as self-employed individuals and those receiving foreign currency payments. The FCA also wants lenders to use broader affordability assessments, rather than automatically excluding borrowers due to minor or historic credit issues.

Retirement and Interest-Only Mortgages

The proposals include updates to rules for retirement interest-only and interest-only mortgages. According to the FCA, these changes could provide older homeowners with greater flexibility when accessing housing wealth or arranging later-life borrowing. The regulator noted that the move follows recent shifts in borrower behaviour as market conditions evolve.

Market Implications and Consultation

The FCA’s proposals are part of a wider mortgage market reform programme, first outlined in December 2025. 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.

The consultation includes an online tool for borrowers to provide evidence about their experiences of the mortgage market. The consultation is open until 28 July 2026, after which the FCA will review responses before deciding whether to implement the proposed changes.

The reforms could have implications for property development financing and broader housing market dynamics as lending criteria evolve.