The Financial Conduct Authority (FCA) has published its FS25/6 roadmap and timeline today, 15th December, setting out its plans for the UK mortgage market.
The roadmap highlighted four main areas.
One was making it easier for first-time buyers (FTBs) and underserved groups to get a mortgage, including those with smaller deposits, irregular income or poor credit.
The FCA plans to encourage lenders to consider rental payments in affordability checks and look again at rules on interest-only, part-and-part and low start mortgages.
Another focus is on later life lending, including reviewing retirement interest-only product rules and loan-to-income limits, and supporting advice that covers both housing and retirement.
The FCA also aims to boost innovation by supporting open banking, open finance and artificial intelligence in mortgages.
It will look at disclosure and promotion rules for digital journeys and encourage industry to use its innovation services and sandboxes.
Protecting vulnerable consumers is another priority, including working with Government and lenders on climate risks, supporting those affected by economic abuse, and updating standards for debt consolidation mortgages.
The FCA said it had spoken to consumers, industry and advocacy groups, with feedback shaping its reforms.
Further consultations are due from 2026.
Ongoing work includes studies on later life lending, updating policies for the consumer duty and supporting responsible digital transformation.
The FCA also stressed the need for joint action from regulators, lenders, Government and others to ensure responsible lending, consumer protection and adaptability to changing demographics and technology.
REACTION:
Seb Murphy, group director at JLM Mortgage Services:
“FS25/6 has some clear positives for advisers. The FCA is right to step back from enhanced advice and to say it supports holistic advice.
“A two-tier system would have caused real confusion and risked pushing clients down the wrong path. That decision matters.
“There are also real opportunities here. A fresh look at later life lending, RIO affordability, interest-only options and how irregular income is treated could help more clients borrow in a sensible way. But none of this makes advice less important. It makes it more important.
“My concern is not what the FCA says it wants, but how this could play out in practice.
“Giving lenders more freedom on product design, disclosure and customer journeys must not lead to advice being treated as optional, or something to add later if problems appear.
“Talk of ‘tolerable harm’ and rebalancing risk needs to stay rooted in real outcomes for real people.
“If access is widened, advice standards must hold firm. Faster journeys and more choice are fine, but they need clear signposting to advice and strong checks for complex cases.
“Otherwise we risk repeating old mistakes, just in a more digital form.”
Damien Burke, head of regulatory practice at Broadstone:
“The FCA’s mortgage market review signals a clear shift towards a more risk-sensitive and data-driven approach, moving away from blunt affordability rules towards assessments that better reflect real borrower behaviour and lifetime income patterns.
“In an age of Open Finance, AI and economic uncertainty, it’s good to see the FCA acknowledge the option of shifting from traditional affordability approaches towards a more nuanced ‘shape of affordability’ and variable payment structures that have already been introduced in the Unsecured Personal Loan market.
“Greater flexibility for first-time buyers, the self-employed and later-life borrowers can widen access without weakening standards, provided lenders continue to anchor decisions in robust credit risk modelling and stress testing.
“The challenge now will be ensuring innovation and AI-enabled advice enhance risk insight and consumer outcomes, rather than simply increasing complexity or mispricing risk.”
