The Financial Conduct Authority's latest review of mortgage lending rules may not sound particularly exciting at first glance. However, for many borrowers, property investors, business owners and professionals, it could become one of the most important developments in the mortgage market for several years.

The FCA has launched a consultation to examine whether existing affordability and responsible lending rules are unintentionally preventing creditworthy borrowers from accessing suitable finance. Whilst consumer protection remains the regulator's priority, there is growing recognition that the modern workforce looks very different from the one that existed when many of today's lending frameworks were introduced.

At Willow Private Finance, we regularly speak to clients who are financially successful, have substantial assets, excellent credit histories and strong cash flow, yet still encounter challenges when seeking finance. The reason is often not a lack of affordability, but the way affordability is measured.

As a result, the FCA is asking an important question: are current lending rules still fit for purpose?

If the answer is no, the outcome could create new borrowing opportunities for self-employed individuals, older borrowers, property investors, entrepreneurs, company directors and high-net-worth clients whose circumstances do not always fit neatly into traditional underwriting models.

Why Is The FCA Reviewing Mortgage Rules?

To understand why this review matters, it helps to look at how we arrived here.

Following the financial crisis, regulators introduced a series of reforms designed to improve lending standards and reduce the risks associated with excessive borrowing. The Mortgage Market Review (MMR) significantly changed how lenders assess affordability, placing much greater emphasis on a borrower's ability to repay their mortgage both today and under potential future financial pressures.

The reforms achieved their primary objective. Mortgage lending became more robust, lenders adopted stricter affordability assessments and the overall quality of mortgage lending improved.

Few people would argue that these changes were a mistake.

However, the UK economy has evolved considerably over the past decade.

More people are self-employed than ever before. Many professionals receive bonuses, dividends or commission-based income. Business owners often leave profits within their companies rather than drawing large salaries. Increasing numbers of people are choosing to work beyond traditional retirement ages, while property investors frequently have multiple income streams that do not fit standard affordability calculations.

In short, modern borrowers have become more complex.

Unfortunately, many lending models have not evolved at the same pace.

This has created situations where applicants who are clearly capable of servicing a mortgage can struggle to secure the borrowing they need because their income profile falls outside a lender's standard criteria.

The FCA's review appears to recognise this growing disconnect.

The Borrowers Most Likely To Benefit

Although no changes have been finalised, several groups could potentially benefit if lenders are given greater flexibility when assessing affordability.

Self-employed borrowers are perhaps the most obvious example.

Over the years, we have seen countless business owners frustrated by mortgage applications that fail to reflect their true financial position. A company director may operate a profitable business generating substantial retained profits, yet only draw a modest salary and dividend package for tax efficiency purposes.

From a business perspective, this often makes perfect sense.

From a mortgage underwriting perspective, it can sometimes create challenges.

Many lenders continue to focus heavily on taxable income rather than considering the wider strength of the business. If the FCA encourages a more nuanced approach, self-employed applicants may find a broader range of lenders willing to assess their circumstances more holistically.

Older borrowers could also benefit.

Life expectancy has increased significantly and many people are now working well beyond traditional retirement ages. Business owners, consultants, professionals and investors frequently continue generating income into their sixties and seventies.

Yet some lenders still apply relatively rigid assumptions around retirement and future income.

A more flexible framework could allow lenders to better reflect modern working patterns rather than relying on assumptions developed decades ago.

Professionals with variable income may also see positive changes.

Many successful individuals earn a significant proportion of their income through bonuses, commissions, performance-related payments or partnership distributions. Whilst some lenders already accommodate these income sources, others remain cautious.

Future reforms could encourage more consistent treatment of variable income across the market, improving access to finance for a wide range of professionals.

What Could This Mean For Property Investors?

Property investors should pay particularly close attention to the FCA's review.

Many experienced investors have financial profiles that look very different from those of traditional owner-occupiers.

Rental income, company profits, investment returns, dividend payments and other sources of income can all form part of an investor's overall financial picture. Whilst these income streams may provide significant financial strength, they do not always fit neatly into conventional affordability assessments.

At Willow Private Finance, we frequently arrange funding for investors whose wealth is spread across multiple assets, businesses and property holdings.

In many cases, the challenge is not whether they can afford the borrowing. The challenge is finding a lender whose underwriting approach properly reflects their circumstances.

If lenders are given greater flexibility when assessing complex borrowers, investors may benefit from increased borrowing capacity, improved lender choice and more tailored funding solutions.

This does not necessarily mean investors will suddenly be able to borrow substantially more. However, it may allow lenders to make decisions based on a fuller understanding of a client's financial position rather than relying solely on standardised affordability calculations.

Could Borrowing Become Easier?

This is perhaps the question many borrowers are asking.

The short answer is that borrowing is unlikely to become dramatically easier.

The FCA is not proposing a return to the lending practices that contributed to the financial crisis. Responsible lending remains at the heart of the UK's regulatory framework and that is unlikely to change.

What may change is how lenders assess risk.

Rather than applying a one-size-fits-all approach, lenders could potentially be encouraged to exercise greater judgement when evaluating applicants with strong but unconventional financial profiles.

That distinction is important.

The objective is not to increase risky lending. The objective is to ensure that borrowers who are genuinely capable of repaying their mortgage are not excluded simply because their income structure differs from the norm.

For many borrowers, that would represent a meaningful improvement.

Why Professional Advice May Become Even More Important

One of the interesting consequences of any future reforms is that lender criteria could become even more varied.

If lenders are given greater discretion in how they assess affordability, some institutions may embrace the flexibility more quickly than others. This could create wider differences between lender approaches.

For borrowers, that means lender selection could become even more important.

A client declined by one lender may still be perfectly acceptable to another.

We already see this regularly with complex cases.

A self-employed business owner, a professional landlord, an expatriate borrower or a high-net-worth client may receive completely different outcomes depending on which lender reviews the application.

Understanding those differences is often where specialist mortgage advice adds the greatest value.

The right lender can make all the difference between a straightforward approval and a frustrating rejection.

What Should Borrowers Do Now?

Whilst the consultation process continues, there is no immediate need for borrowers to delay plans or wait for potential rule changes.

Current lending criteria remain in force and lenders continue to offer a wide range of solutions for borrowers with complex circumstances.

In fact, many specialist lenders already take a more flexible approach than borrowers realise.

If you are self-employed, maintaining clear and up-to-date financial records remains essential. If you are an investor, understanding your borrowing capacity before identifying opportunities can significantly improve your ability to move quickly when deals arise.

Similarly, older borrowers should not assume age alone will prevent them from obtaining finance. Many lenders already offer solutions for applicants beyond traditional retirement ages, provided their overall circumstances support the application.

The key is obtaining advice from advisers who understand the specialist lending market and have access to a broad range of funding options.

Looking Ahead

The FCA's review reflects a broader reality within the UK mortgage market.

The way people earn money, build wealth and structure their finances has changed dramatically over the past decade. Lending rules have understandably prioritised consumer protection, but there is growing recognition that some borrowers may be underserved by existing frameworks.

At Willow Private Finance, we welcome any review that seeks to balance responsible lending with a more realistic understanding of modern financial circumstances.

Many of the clients we assist are successful professionals, entrepreneurs, investors and business owners whose financial strength is not always immediately obvious from a standard mortgage application.

If the FCA's consultation ultimately leads to a more flexible and nuanced approach to affordability, it could create meaningful opportunities for a wide range of borrowers without compromising the stability of the mortgage market.

For now, however, the most important message remains unchanged.

Every lender assesses risk differently, every borrower is unique and expert advice continues to play a critical role in securing the right finance solution.

Frequently Asked Questions

Will the FCA's proposed mortgage rule changes make it easier to get a mortgage?

Potentially, but not necessarily for everyone. The FCA is reviewing whether current affordability assessments are unintentionally excluding borrowers who are financially strong but have more complex circumstances. Any changes are likely to focus on improving flexibility rather than lowering lending standards.

Could self-employed borrowers benefit from the FCA review?

Yes. Self-employed applicants are one of the groups most likely to benefit if lenders are given greater flexibility when assessing affordability. Future changes could encourage lenders to place more emphasis on business profitability, retained earnings and overall financial strength rather than focusing solely on salary and dividend income.

How might the FCA changes affect older borrowers?

The FCA is examining whether current lending practices properly reflect modern working patterns. Many people now work beyond traditional retirement ages, and future reforms could encourage lenders to take a more individual approach when assessing older applicants rather than relying heavily on age-based assumptions.

What could the changes mean for property investors?

Property investors often have multiple income streams, including rental income, dividends and business profits. If lenders are encouraged to adopt more nuanced affordability assessments, investors may benefit from improved access to finance and a wider range of borrowing options.

Are mortgage lenders expected to relax affordability checks?

The FCA is not proposing a return to the loose lending practices seen before the financial crisis. Responsible lending will remain a key priority. The focus is likely to be on allowing lenders greater discretion when assessing complex borrowers rather than reducing affordability requirements altogether.

Should I delay a mortgage application until the FCA review is complete?

In most cases, no. Existing mortgage products and lending solutions remain available, and many lenders already take a flexible approach to complex applications. If you need finance now, it is usually better to seek professional advice rather than waiting for potential regulatory changes that may take time to implement.

Will high-net-worth individuals benefit from the proposed reforms?

Potentially. High-net-worth borrowers often have significant assets but relatively modest taxable income. Future changes could encourage wider adoption of underwriting approaches that consider overall wealth, investment holdings and asset positions alongside traditional income assessments.

When are the FCA mortgage rule changes expected to take effect?

The FCA consultation is currently under review, and no final timetable has been confirmed. Any proposed changes would need to be assessed, agreed and implemented before lenders adjust their underwriting policies. Borrowers should continue to plan based on current lending criteria until formal changes are announced.

Can specialist mortgage brokers help if I have complex income?

Yes. Many lenders assess complex income differently, and the right lender can make a significant difference to the outcome of an application. Experienced mortgage brokers can identify lenders that are comfortable with self-employed income, dividends, retained profits, bonus income, multiple income streams and other non-standard circumstances.



How can I improve my mortgage prospects regardless of any FCA changes?

Maintaining a strong credit profile, keeping financial records up to date, reducing unnecessary debt and seeking advice early can all improve your chances of securing finance. For self-employed borrowers and investors in particular, presenting clear evidence of income and assets remains essential.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We'll help you find the smartest way forward, whatever rates do next.

👉 Talk to Willow.