Proposed changes to mortgage rules could give estate agents access to a broader pool of credible buyers but borrowers will require advice to navigate the additional flexibility, the Association of Mortgage Intermediaries has warned.
AMI has broadly welcomed the Financial Conduct Authority’s proposals to improve mortgage access for first-time buyers and underserved customers, describing them as targeted and proportionate.
The plans could help applicants with variable incomes, minor historic credit problems or foreign-currency earnings, alongside older borrowers and customers requiring more flexible repayment structures.
For estate agents, the reforms could enable more prospective buyers to secure finance and progress with purchases. However, their impact will depend on lenders adopting the new flexibility once the FCA publishes its final rules.
INTEREST-ONLY SAFEGUARDS
The FCA is considering changes covering interest-only and part-and-part mortgages, retirement interest-only lending, irregular payments, credit-impaired applicants, foreign-currency loans and regulated bridging finance.
AMI says part-and-part mortgages, where borrowers repay some capital while servicing the remainder on an interest-only basis, could provide a more sustainable compromise for many customers.
It warns that suitable advice and credible repayment plans would remain essential, particularly where borrowers were not repaying the full capital balance through monthly payments.
The association also wants lenders to signpost customers towards advice when arranging interest-only product transfers, providing an opportunity to review whether their repayment strategy remains realistic.
Stephanie Charman, chief executive of AMI, says: “These proposals will only work if lenders and advisers adopt and implement them, otherwise they will fail in their aim to improve access to the market for more first-time buyers.”
CLARITY NEEDED
AMI has asked the FCA to define “tailored interactive dialogue” clearly so consumers understand whether they are receiving regulated advice and firms know where their liability begins.
It also wants the final rules to confirm how repayment strategies should be assessed at the point of sale, reducing the risk of advisers facing retrospective challenges years later.
Proposals allowing non-monthly repayments require further analysis because credit-reference reporting systems are largely structured around monthly payment cycles, AMI added.
Charman said: “Advisers also need confirmation that a reasonable assessment made in good faith today won’t be second-guessed decades from now.”
The FCA consultation closed on 28 July. The regulator expects to publish its final rules during the second half of 2026.
