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

Paradigm Calls for Debate on Mandatory Mortgage Advice for First-Time Buyers

Paradigm Mortgage Services has published a discussion paper on the issue of mandatory mortgage advice for first-time buyers. The firm is calling on the industry to publicly support a debate on whether first-time buyers should be required to receive regulated advice before securing a mortgage.

The discussion follows the Financial Conduct Authority’s (FCA) removal of the mortgage advice interaction trigger, which has led to concerns that first-time buyers may increasingly take execution-only mortgage journeys without receiving professional advice. Paradigm notes that this regulatory change could result in first-time buyers never securing advice, which it views as a significant consumer protection risk.

Paradigm has engaged with lenders, advisers, networks, trade bodies, and providers, and reports a growing recognition that first-time buyers are particularly exposed to poor outcomes if they navigate the mortgage process without structured, regulated advice. The company emphasises that its call for debate is not an attack on lenders, banks, technology, or digital mortgage journeys, but is focused on achieving positive consumer outcomes in line with Consumer Duty requirements.

The discussion paper highlights that first-time buyers are often making long-term financial commitments for the first time, under emotional pressure, and must interpret complex information from various sources. Many are also dealing with higher loan-to-value borrowing, changing interest rate expectations, and complex product structures, all within a challenging economic environment. Paradigm argues that these factors create a risk of foreseeable harm, which firms are required to identify and mitigate under Consumer Duty.

Paradigm’s position is that the current market framework may not adequately protect first-time buyers, as it allows them to self-diagnose whether they need advice. The company is encouraging the industry to consider whether mandatory advice should be introduced to better safeguard this group of consumers.