Mandatory regulated mortgage advice for all first-time buyers (FTBs) should be introduced, a new discussion paper published by Paradigm Mortgage Services has outlined.

The company argued that the move would represent a “proportionate, evidence-based evolution” of regulation under Consumer Duty.

The paper, entitled Mandatory Mortgage Advice for First-Time Buyers: A Proportionate Regulatory Evolution Under Consumer Duty – which has already received support from mortgage stakeholders – has been launched following recent FCA regulatory changes, including the removal of the long-standing mortgage advice ‘interaction trigger’ as part of last year’s Mortgage Rule Review.

Paradigm argued that the combination of expanded execution-only mortgage pathways, the removal of structural prompts to advice, and growing evidence of consumer vulnerability creates a clear regulatory inflection point for the mortgage market.

The paper set out the case that FTBs frequently display multiple vulnerability indicators, including limited experience with long-term financial products, lower financial resilience, high emotional investment in the home-buying process, and significant information asymmetry relative to lenders and advisers.

It also highlighted findings from the FCA’s own Pure Protection Market Study, published in January this year, which found 58% of UK adults do not hold any pure protection product and that 72% of identified protection needs remain unmet.

Paradigm argued the home-buying process represents one of the most appropriate and impactful moments for consumers to consider protection, yet without advice many first-time buyers will receive no structured assessment of those needs.

The paper further warned that an execution-only mortgage process assumes consumers can independently identify and select suitable mortgage products, an assumption it argued is inconsistent with FCA evidence on consumer understanding, particularly for borrowers making their first ever property purchase.

Paradigm said it believes foreseeable harms within execution-only pathways can include selecting unsuitable mortgage products, misunderstanding affordability risks in a volatile rate environment, failing to consider lender-specific criteria affecting future borrowing, and missing essential protection conversations.

Bob Hunt, CEO at Paradigm Mortgage Services, commented: “What we are proposing is a proportionate and targeted safeguard for a consumer group making one of the biggest and longest-term financial commitments of their lives."

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