UK Watchdog to Loosen Mortgage Rules to Allow for More Products
TL;DR
The UK's Financial Conduct Authority plans to reform mortgage rules to increase access, focusing on flexible products for varied work patterns and later-life lending. It will consult the public in early 2024 and implement changes by late next year.
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The UK’s financial regulator is weighing a series of reforms for the country’s mortgage market designed to widen access by responding to more flexible working patterns and longer life expectancies.
The Financial Conduct Authority said it would consult the public early next year on a package of measures including simplifying mortgage rules, later-life lending, the use of technology and protecting vulnerable consumers, according to a statement Monday. The watchdog said it plans to have the first rule changes in place later next year.
“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,” said David Geale, executive director for payments and digital finance at the FCA.
Read more: UK’s £2 Million-Plus Homes Risk Losing 5% in Value Next Year
The FCA plans to simplify mortgage rules to allow more flexible products that reflect different working patterns and income levels, according to the statement. Its planned reforms to later-life lending will focus on reviewing retirement interest-only requirements to make them more accessible.
The watchdog will also focus on encouraging the use of AI to better help brokers give advice, while looking at ways to make advertising rules simpler. It said it would also focus on supporting people affected by financial abuse and help those using a mortgage to manage debt.
“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 FCA’s Geale said.