UK FCA consults on supporting first-time buyers and underserved consumers under mortgage rule review

The UK Financial Conduct Authority (FCA) has published consultation paper CP26/18 as part of its mortgage rule review, proposing targeted reforms to improve access to mortgage lending for first-time buyers and underserved consumers. The proposals follow the June 2025 discussion paper on the future of the mortgage market and the FCA's feedback statement.

The proposals seek to:

• Widen access to interest-only and part interest-only lending.
• Make it easier to raise mortgage finance in later life.
• Lower barriers for firms that want to lend to consumers with irregular income.
• Encourage lenders to take a more individualised approach when assessing the creditworthiness of customers with impairment in their credit history, rather than declining them based on a definition designed for debt consolidation and reporting purposes.
• Lower barriers for firms that want to lend in a foreign currency or to consumers with a foreign income.
• Increase flexibility for borrowers who want bridging finance, which can help break a lengthy sales chain or fund a renovation.
• Increase the scope for firms to offer mortgages with different features and therefore, different risks.

The FCA's proposals take into account the potential for adverse outcomes for some consumers, and also consider the risk that consumers may need to rent for longer if they cannot purchase a home. The deadline for comments is 28 July. Feedback will be considered and a final policy statement is expected in the second half of the year.

Return to main website.