In March, the Financial Conduct Authority (FCA) issued a statement that could have major implications for the mortgage market, especially for first-time buyers and home movers.
The FCA revealed that many lenders may not be making full use of the flexibility already allowed within current affordability rules, particularly around stress testing. This type of testing assesses whether borrowers could still afford their mortgage if interest rates were to rise, and for years it has been a major stumbling block for many applicants.
May Consultation Aims to Simplify the Rules
Following the March statement, the FCA opened a consultation in May with proposals to simplify and clarify these rules. Their goal is to help lenders feel more confident in applying discretion, without compromising responsible lending.
More Flexibility Means More Opportunity
Since that March announcement, we’ve seen the first signs of change. Some lenders are beginning to ease the way they assess affordability—great news for those who may have found the door to homeownership closed in recent years.
This could be a game-changer for:
- First-time buyers struggling to pass stress tests, even with good income and low debt.
- Home movers needing to borrow slightly more to make the move work.
- Anyone who assumed they wouldn’t qualify due to rising rates or cautious lenders.
If you’ve previously been told “no” by a lender, this could be the moment to revisit your plans.
Now Is the Time to Reassess Your Options
At Citrus Financial, we’re already helping clients take advantage of this evolving landscape. If you gave up on buying because you thought you couldn’t borrow enough, or at all, it’s worth speaking to us.
Lenders are slowly becoming more flexible, and with expert advice, you may find that what once felt out of reach is now possible.
Need mortgage advice?
Get in touch with Citrus Financial today to see how these changes might work in your favour.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Approver Quilter Financial Services Limited & Quilter Mortgage Planning Limited. 01/05/2025
About the author: David is a highly regarded financial expert, known to many as BBC Radio Kent’s “Money Mentor,” where he shares practical advice and insights on managing money effectively. As the founder of Citrus Financial, David has built a reputation for providing tailored financial guidance to individuals and families, helping them achieve their financial goals with confidence.
You can hear more of David on BBC Sounds.
