The Financial Conduct Authority (FCA) has outlined new plans for the mortgage sector aimed at helping first-time buyers and the self-employed onto the housing ladder.

The regulator’s priorities for reforms to the mortgage market also include helping homeowners unlock housing wealth for a more comfortable later life.

From early 2026, the FCA said it would start to consult the public on proposed rule changes in four key areas, ahead of having the first rule changes in place later next year.

The four focus areas cover first-time buyers and underserved consumers, which will see simplified mortgage rules to allow more flexible products that reflect different working patterns and income levels at different stages of life.

Another focus will be the later life lending sector, with the FCA planning to review retirement interest-only requirements to make them more accessible and explore ways to improve advice to help people plan for later life more confidently.

Innovation is another area of focus with the FCA looking to encourage the use of data and technology, such as AI, to help brokers give better and faster advice while keeping a human touch.

Protecting vulnerable consumers is the fourth area with the regulator hoping to work with partners to support people affected by financial abuse and help those using a mortgage to manage or consolidate debt.

“We have worked at pace this year to improve outcomes for customers wanting a mortgage,” said executive director for payments and digital finance at the FCA, David Geale.

“We’ll use insight from consumers and industry to drive further reforms and rebalance risk – helping to widen access to affordable mortgages to meet the needs of consumers today.

“Reforming the mortgage market can help address the fact that as a society we’re saving too little for later life, yet people have huge wealth tied up in property.”

The regulator’s rule review roadmap was welcomed by the chair of the Equity Release Council, David Burrowes, who said: “The FCA’s acknowledgement that housing wealth will play an increasingly important role in later life financial wellbeing is both timely and necessary.

“For many older homeowners, later life lending is no longer a niche option, but a practical and responsible way to support retirement income, manage debt, or remain in their own homes for longer.”

Mortgage distribution director at Quilter Financial Planning, Zara Bray, described the FCA’s roadmap as “ambitious and welcome” but warned it can only work in parallel with “a Government committed to overcoming the UK’s deep-rooted housing challenges”.

“Even with more flexible lending approaches, limited housing stock will continue to be a major brake on homeownership,” Bray said. “Without sustained supply-side action, the benefits of regulatory innovation will be constrained, particularly for first-time buyers facing intense competition for too few properties.”

On the FCA’s focus on technology, Bray added: “It is encouraging to see the FCA embracing the opportunities presented by open finance, AI and improved data sharing. These tools can help advisers deliver personalised recommendations efficiently at scale, provided human judgement remains firmly at the centre of the process.

“Technology can enhance the advice process, but it cannot replace the trust and accountability that consumers rely on when making major financial decisions.”

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