Potential new mortgage rules could boost home ownership

The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first-time buyers, self-employed, and those borrowing in retirement.

The point of the paper is to spark a public conversation to help those looking to buy their first home to get onto the property ladder, and those in retirement manage their mortgage more effectively, with the goal being to support long-term growth.

The paper looks at possible changes to improve flexibility and allow borrowing to be more accessible by offering tailored products to customers to cater to their specific needs.

Key areas include:

• Updating responsible lending rules
• Addressing the growing need for later-life-lending (equity release)
• Enhancing consumer understanding
• Encouraging innovation in lending practices

The FCA are looking for thoughts on whether the stress test for mortgages should be changed. They are also looking into the number of homeowners who need to access their housing wealth to help financially support them in retirement.

This could be a positive move by the FCA provided borrowers are not overstretched.