The Financial Conduct Authority’s (FCA) latest reforms to mortgage rules have been broadly welcomed across the industry – and rightly so. In an era where affordability is under strain and consumer financial resilience is being tested, any step that increases access to more suitable, affordable mortgage products is a positive development.
These changes, which simplify the remortgaging process, ease affordability checks for borrowers shortening their mortgage term, and remove some legacy guidance, reflect a more pragmatic, customer-centric approach to regulation. They allow lenders to apply a lighter-touch process in specific scenarios – such as when borrowers are switching to a cheaper product – without compromising key protections like regulated advice and underlying affordability assessments.
For many households, this will mean saving time and money, and potentially avoiding unnecessary friction when trying to make sound financial decisions. For lenders, it signals a shift in regulatory tone – one that encourages innovation, flexibility and competition.
However, these reforms must be approached with careful consideration. These new flexibilities are just that: optional, not mandatory. The responsibility now sits with lenders to implement them in a way that is both operationally robust and risk-aware.
It is easy, in the face of regulatory change, to focus on speed to market or competitive differentiation. But when processes are loosened, even slightly, the risk of inconsistency or oversight can grow. That risk is even greater in today’s climate, where economic outlook remains uncertain. Lenders must ensure that any efficiency gained through regulatory flexibility does not come at the expense of proper oversight, robust servicing or the support vulnerable customers may need over time.
This is where modern technology plays a critical role. It enables lenders to safely adapt their operational models – automating compliance checks, flagging risk indicators, and delivering faster, smoother journeys for borrowers – without losing sight of internal controls or long-term outcomes. Crucially, it helps institutions act quickly and confidently without undermining accountability.
The conversation around regulatory reform, of course, goes far beyond mortgage rules. In the days following the FCA’s announcement, Bank of England governor Andrew Bailey issued a stark warning against the broader loosening of banking regulations. Speaking to MPs, he cautioned that sweeping deregulation in pursuit of economic growth could echo the mistakes that led to the 2008 financial crisis – particularly if core protections like ringfencing are eroded.
His message was clear: there is no trade-off between financial stability and growth. The two must be developed in tandem. That principle applies as much to consumer lending as it does to investment banking. The mortgage market has made real progress in embracing innovation but trust in the system relies on maintaining strong foundations.
The FCA’s reforms are timely and sensible. They remove unnecessary barriers and better reflect the modern mortgage landscape. But their success will depend not just on how they’re written, but on how they’re adopted. The best lenders will be those who implement these changes thoughtfully, drawing on agile technology and risk management frameworks to ensure consistent, compliant execution at scale.
The future of the mortgage market lies in striking the right balance – between flexibility and responsibility, customer experience and control. These reforms are a welcome opportunity to raise the bar. But lasting progress will only come when innovation is matched with prudence.
Richard Pike is chief sales and marketing officer at Phoebus Software
