The Financial Conduct Authority (FCA) has announced plans to initiate a “public conversation” on the future of the mortgage market.

First-time buyers, the self-employed and people borrowing into retirement could all benefit from future changes to mortgage rules, the regulator said.

The FCA suggested that the mortgage market has “changed considerably” in recent years. First-time buyers are older and borrowing for longer, including into later life, and FCA data has shown shown that in 2024, 68% of first-time buyers borrowed for terms of 30 years or longer.

Homeowners will also increasingly need to access their housing wealth to provide for their needs during retirement, the regulator warned.

Potential areas that the FCA intends to cover with a discussion paper include updating responsible lending rules to support wider access to sustainable homeownership.

The regulator also said it wants to prepare the mortgage sector for “likely” future increases in demand for later life lending, as well as introduce more flexibility to promote consumer understanding, and “rebalance the collective risk appetite” in mortgage lending.

“We want to evolve our mortgage rules to help more people access sustainable homeownership,” commented executive director for payments and digital finance at the FCA, David Geale. “Having achieved higher standards in the market, now is the time to consider allowing more flexibility in a trusted market.

“Changing our mortgage rules could make it easier for people to get onto the property ladder and manage mortgages into retirement.

“We can’t solve all the issues related to homeownership. But we’re playing our part in helping people better use the mortgage market to navigate their financial lives and to encourage a dynamic, innovative and competitive market.”

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