Regulator acts to ease access to mortgages for homebuyers

The Financial Conduct Authority (FCA), the City regulator in the United Kingdom, has pledged to take swift actions aimed at improving access to mortgages for consumers. In May 2025, the FCA will launch a consultation that outlines preliminary ideas designed to simplify mortgage rules. This initiative seeks to make it easier for consumers to consider options like remortgaging with a new lender and adjusting the term of their current mortgage. Furthermore, the FCA plans to begin a public discussion in June about the mortgage market's future, addressing various needs consumers have at different stages of their lives and the broader UK economy. The upcoming public discussion will explore the necessary elements that the mortgage market must fulfill to better serve diverse consumer needs. It will also re-evaluate the regulatory framework that guides these operations. Additionally, the FCA will issue a call for evidence regarding current and alternative methods for stress testing. Mood shifts in the market have led the regulator to question whether existing approaches to stress testing are overly restrictive, potentially limiting access to mortgages that consumers can afford even in the context of rising interest rates. Since the mortgage lending rules were significantly tightened after the 2008 financial crisis, the FCA acknowledges the need for careful consideration in ensuring that homeownership is attainable for qualified borrowers. Nikhil Rathi, the FCA chief executive, emphasized the importance of swift action in facilitating ownership opportunities. The FCA reassured that it is prepared to utilize its regulatory flexibility so that creditworthy consumers can benefit from affordable mortgage options. Chancellor Rachel Reeves also embraced this initiative as a means to catalyze economic growth and support working families in their quest for housing. She underscores the necessity for streamlined policies as the landscape of the financial market evolves. The overarching goal set by the FCA is to expand homeownership opportunities and bolster the economy through pragmatic and responsive regulatory changes.