Another step has been taken to relax the mortgage rules in an attempt to stimulate the homeowner and make it easier for people to buy their own home.
First buyers (FTBs), the independent and people who retire are part of the MortGage Rule Review of the Financial Conduct Authority (FCA), which is now open to discussion.
The supervisor has asked to update feedback on proposals to update the rules for responsible lending, helping to make mortgages more accessible and makes it easier for more people to buy their own home.
But it also wants to see how mortgages can be managed more effectively in retirement. The FCA said that first buyers are now older and borrow longer, also in later life. The data showed 68% of the first buyers in 2024 in 2024 for conditions of 30 years or longer.
And it has acknowledged that homeowners should also have increasingly access to their housing to meet their needs during retirement and wants to hear the feedback about how this can be achieved.
David GEALE, executive director for payments and digital finances, at the FCA, said: “We want to develop our mortgage rules to help more people gain access to sustainable home ownership.”
He added: “Changing our mortgage rules can make it easier for people to get to the real estate ladder and to retire mortgages.
“We cannot solve all the problems related to home ownership. But we play our role in helping people to better use the mortgage market to navigate their financial life and to encourage a dynamic, innovative and competitive market.”
Balancing Act
Although the FCA wants to down the obstacles that many people stand for when they try to buy their own house with a mortgage, it will also be aware that these rules are in place for a good reason.
After the financial crisis in 2008, limitations on mortgages became tighter. However, it is now generally accepted that they do not serve consumers and this has a negative influence on the housing market.
The FCA said that home ownership had become an ever -challenging ambition for many, with more people renting for a longer period of time. Those who rent are confronted with higher housing costs and less security.
Paul Broadhead, head of mortgage and housing policy at the Building Society Association (BSA) said that members would contribute to the assessment. He added: “Since the financial crisis, it has been clear that the regulatory shuttle has been waved too far to caution and has given detailed rules priority at the expense of access to the benefits of homeowner for many creditworthy families.”
He said that there were both risks and opportunities in mortgage regulation and when revising this it was important to maintain the trust that consumers have on the mortgage market, while they were also radical and ambitious to support more people on their journey for homeowners.
“We must be aware of the way people live today and ensure that all proposals are future -proof,” he said. “Formative assessments of the mortgage market are rare, so this is possible once in a generation option. The outcome of both this review and a supply plan from the government must together create an environment where houses are more affordable, more available and more suitable for the needs of those who will live in it.”