FCA Mortgage Rule Review – What It Could Mean for Buyers

Friday 3 October, 2025

For anyone currently navigating the mortgage market, especially first-time buyers, the self-employed, or those looking to borrow later in life, the recent announcements from the Financial Conduct Authority (FCA) are particularly significant.

The FCA has confirmed it is continuing its review of mortgage rules in an effort to boost home ownership and support wider economic growth. While no definite changes have been introduced yet, the signals coming from the regulator suggest that the landscape could become more flexible and accessible in the near future.

Opening the Market to More Buyers

The FCA’s review has been shaped by concerns that the current affordability rules and regulatory approach may be creating unnecessary barriers to lending for certain groups. The regulator is considering whether lenders could be given more freedom to use their own judgement, alongside rigorous but proportionate checks, when assessing whether someone can afford a mortgage.

At the heart of the potential changes is a desire to rebalance the market. The FCA is exploring how to remove obstacles for borrowers who don’t fit the traditional lending mould, such as the self-employed or those with irregular income streams. It’s also considering the growing number of people who want to borrow into retirement, as well as those who have been renting long-term and can clearly demonstrate a strong history of making payments similar to a mortgage.

These updates come at a time when home ownership levels remain out of reach for many, despite the fact that some renters have the financial discipline and income required to sustain a mortgage. The FCA is therefore examining whether new approaches, such as recognising rental payment histories as part of affordability checks, might make the system fairer without increasing risk.

What’s Changing and What Isn’t (Yet)

While the direction of travel is promising, no formal changes have yet been implemented. The FCA is clear that this remains a review process and not a rule change at this stage. Any amendments to existing regulations would require further consultation and clarity on how risks to consumers and the financial system will continue to be managed responsibly.

So, for now, all applications for mortgages must still meet the current rules and affordability assessments. That means anyone in a position to move forward should base their decisions on the market as it stands today rather than waiting in hope of future reforms.

Expert Advice in Uncertain Times

At a time of regulatory review and potential change, having the right advice is more important than ever. Lonsdale’s experienced mortgage advisers are here to help our clients make sense of the current landscape, offering practical support whether they are first-time buyers, moving home, or remortgaging.

While the FCA’s review may make home ownership more achievable in future, it's still essential to work within the rules that currently apply.

As Joe Wicks, Mortgage Adviser in St Albans, says:

“While the FCA’s review is a positive sign for the long-term flexibility of the mortgage market, if you're in a position to buy now, it's still best to act based on the current rules. We can help you understand what’s possible and find the most suitable deal for your situation.”

Make Your Next Move with Confidence

Although the possibility of rule changes may offer hope to many future borrowers, those ready to take the next step now should seek advice that reflects today’s conditions. At Lonsdale, the team takes the time to understand each client's individual situation and offer clear, friendly guidance throughout the mortgage journey.

To explore your mortgage options or to find out what might be achievable based on your current circumstances, contact the team at Lonsdale today.

Please note: As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. This article is for information only and does not constitute advice.

Sources: www.fca.org.uk, www.independent.co.uk