What’s this about?
The FCA has published Consultation Paper CP26/18, “Mortgage Rule Review: Supporting first-time buyers and underserved consumers” and is consulting on a package of proposed rule and guidance changes until 28 July 2026. The proposals are designed to open the door to mortgages for people who are currently being excluded from the mortgage market, including first-time buyers, those with variable or irregular incomes, later-life borrowers, and people with historic credit impairment.
The package aims to reduce regulatory red tape that may be limiting access to suitable mortgages for creditworthy but underserved borrowers, while remaining anchored in the FCA’s responsible lending framework and the Consumer Duty. The FCA acknowledges that some rebalancing of risk is inevitable but considers that stronger existing protections now create room to widen access safely. The proposals are largely permissive, firms can choose to adopt them, but the changes carry real implications for policies, systems, governance, and outcomes monitoring.
Richard Clark, Legal Director at TLT, says…
“The FCA’s mortgage rule review is a significant moment for lenders and advisers alike. These proposals create real opportunities to serve borrowers who have historically been underserved — but firms should not treat this as a deregulatory green light. The Consumer Duty remains central, and any firm looking to adopt the new flexibilities will need to demonstrate that their policies, processes, and outcomes monitoring are fit for purpose before they do so. Getting ahead of that work now, ahead of the Policy Statement in H2 2026, is the sensible approach.”