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First-time homebuyers, the self-employed and pensioners could find it easier to get a mortgage in the UK under plans to ease restrictions on lenders announced by the financial watchdog on Monday.
The Financial Conduct Authority said there are a number of areas where it could do this Improve its mortgage rules “Broadening access, supporting sustainable home ownership, supporting growth and improving lives”.
The planned easing of mortgage rules is part of the FCA’s effort to encourage banks to take on more risk as it responds to calls from the government for further measures to boost UK economic activity.
The watchdog has already eased some restrictions this year, contributing to strong growth in the mortgage market. It estimates the changes have allowed lenders to offer around £30,000 more to the average home buyer.
UK net mortgage approvals reached their highest level of the year in September, according to the Bank of England. trade body uk finance estimated Banks increased their total lending for home purchases by 22 per cent this year to £176bn and predict a further rise of 2 per cent in 2026.
“We will use insights from consumers and the industry to drive further reforms and balance risk – helping to increase access to affordable mortgages,” said David Gilley, executive director of payments and digital finance at the FCA.
“Reforming the mortgage market could help solve the fact that as a society we are saving very little for later life, yet people still have huge wealth tied up in property,” he said.
Rules on more flexible products, such as “part and partial mortgages” on which only some of the loan is repaid before it matures, could be eased to help get first-time buyers into the property market.
Other changes being considered by the FCA could help people with variable or lump sum incomes, such as the self-employed, to get mortgages, as well as those who have had bad credit in the past but have since improved their credit rating.
It also plans to investigate how innovative products, such as retirement interest-only mortgages, can help older people raise money against the value of their home or repay earlier mortgages that are maturing.
FCA chief executive Nikhil Rathi said a speech last month An estimated 43 percent of people are not saving enough for retirement despite expected higher rates of homeownership.
“How will households meet retirement goals, needs and potential care costs?” Rathi said. “Could some of the country’s £9tn housing estate be unlocked more effectively, and put to more productive use, particularly to maintain living standards in later life?”
The FCA said it would launch a consultation early next year on its planned rule changes, which also include measures to encourage artificial intelligence to improve and speed up mortgage advice. It aims to begin the transition by the end of 2026.
It will commission a market study to examine “how the later-life lending market might evolve to meet the different needs of future consumers”, including allowing more holistic advice on the range of financial options available to people in retirement.
