For first-time buyers and underserved consumers, the FCA plans to simplify mortgage rules to allow more flexible products that accommodate different working patterns and varying income levels throughout life stages

The UK’s Financial Conduct Authority (FCA) announced plans to reform mortgage rules to help first-time buyers and self-employed individuals access the housing market more easily.

The regulatory body outlined four key areas of focus for its mortgage market reforms, which also aim to help homeowners unlock housing wealth for retirement.

For first-time buyers and underserved consumers, the FCA plans to simplify mortgage rules to allow more flexible products that accommodate different working patterns and varying income levels throughout life stages.

In the later-life lending sector, the regulator will review retirement interest-only requirements to improve accessibility and explore ways to enhance advice for retirement planning. The FCA will also conduct a market study on lifetime mortgages to ensure they meet future customer needs.

The third focus area involves encouraging innovation through data and technology, including AI, to help brokers provide better and faster advice while maintaining human interaction. The regulator also aims to simplify advertising and disclosure rules for better online consumer understanding.

Finally, the FCA will work with partners to protect vulnerable consumers, particularly those affected by financial abuse or using mortgages to manage debt.

David Geale, executive director for payments and digital finance at the FCA, said: We’ll use insight from consumers and industry to drive further reforms and rebalance risk – helping to widen access to affordable mortgages to meet the needs of consumers today.

The FCA will begin public consultations on proposed rule changes in early 2026, with the first changes expected later that year. Terms of reference for the later life lending market study will be published in the first quarter of 2026.

Earlier this year, the FCA reminded firms about flexibility in interest rate stress tests, which led to industry action that widened borrowing options and allowed lenders to offer around £30,000 more to many borrowers.

Despite rising interest rates and living costs, 99% of mortgages taken out since 2014, when mortgage standards were tightened, are not in arrears.