The Financial Conduct Authority (FCA) is reviewing mortgage rules and looking for feedback on how to help more people buy homes, including first-time buyers (FTBs), the self-employed and those borrowing into retirement.
The regulator said it is considering changes to responsible lending rules, more flexibility for consumers, and preparing for increased demand for lending later in life.
David Geale, executive director for payments and digital finance at the FCA, said: “We want to evolve our mortgage rules to help more people access sustainable home ownership.
“Having achieved higher standards in the market, now is the time to consider allowing more flexibility in 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 added: “We can’t solve all the issues related to home ownership.
“But we’re playing our part in helping people better use the mortgage market to navigate their financial lives and to encourage a dynamic, innovative and competitive market.”
The FCA will work with firms to use existing flexibility in affordability checks, which has helped more people get mortgages.
Feedback on the FCA’s discussion paper closes on 19th September.
REACTION:
Dave Harris, chief executive at more2life:
“It’s hugely encouraging to see later life lending receive its own dedicated chapter within this FCA discussion paper; a clear recognition this is no longer a specialist niche sector, but a vital and growing part of the mortgage market.
“The regulator is absolutely right to highlight that more borrowers are now likely to carry mortgage debt into retirement, and that lending into later life must be supported by the right product innovation, regulatory framework and advice.
“At more2life, we’ve been leading this charge for years, developing flexible product solutions that meet the evolving needs of over-55s including those that reward borrowers who wish to pay off some, or all, of their interest.
“However, for the market to truly scale, we need broader commitment, greater competition and regulatory support that fosters innovation rather than friction.
“If the regulator does want to encourage more product choice and solutions, we need an environment where providers are willing and able to match our own long-term investment and commitment to later life lending, even when conditions can be challenging.
“We strongly support the FCA’s apparent interest in breaking down the entrenched silos that exist between mainstream mortgage advice and later life lending.
“The idea of wider, even mandatory, use of the equity release qualification is a positive one.
“The reality is that too many consumers are missing out on potentially life-changing financial options because their adviser isn’t qualified or authorised to discuss and recommend them.
“An enhanced advice model, where more advisers can confidently consider later life lending solutions, will deliver better outcomes for older borrowers and help address some of the wider societal challenges the paper rightly highlights – from pension under-saving to retirement insecurity.
“However, if we’re to empower advisers to take on this broader remit, we must also support them. Advice in this space needs confidence, clarity and capability.
“That’s why more2life remains committed to delivering the tools, training and partnership support advisers need to serve their clients effectively and efficiently.
“In this paper, the regulator appears to have adopted a much more progressive tone and open engagement towards the later life lending space which is clearly positive, and we echo the call for the industry to step forward, share views, and help shape a market that works better for consumers, the advisers who support them, and the providers committed to this space.”
Jamie Jenkins, policy director at Royal London:
“While the discussion paper is primarily focused on conventional mortgages, it raises some very important questions on the future role of later life lending.
“While it is currently a highly specialised advice activity, this may need to change in future, with many people having insufficient pension savings and turning to the equity in their home to supplement their retirement income.”
Pete Maddern, managing director of retirement at Canada Life:
“Property is often the single largest asset for those approaching or at the point of retirement. With more people living longer and many under-saving into pensions, it’s vital that housing wealth becomes a core part of financial planning for later life, alongside pensions and other savings.
“Canada Life’s own data reveals an increasing proportion of people releasing equity to cover day-to-day living costs from Q1 2024 to 2025, suggesting there is a growing reliance on property wealth to meet essential needs in retirement.
“In addition, equity release is also commonly used to fund aspirations such as home improvements, gifting to family, or even supporting long-term care.
“It’s encouraging to see the FCA recognise the positive role that the later life lending industry can play in providing financial stability and flexibility in later life.
“As customer needs continue to evolve, now is the time to rethink the regulatory framework to break down silos and enable truly joined-up, holistic retirement planning.”
