Lenders are split on whether regulatory scrutiny will ease in 2026, new research from Target Group suggests.
Polling carried out earlier this month at the Future of Mortgage Servicing conference at the Belfry, hosted by Target Group and Phoebus Software, asked senior figures from across the mortgage sector whether they expected regulatory scrutiny to ease next year.
Of the 100 c-suite mortgage professionals surveyed, 35% said they expected scrutiny to ease in 2026. A further 35% said they anticipated no change, while the remainder believed regulation would become more intense.
The mortgage market remains subject to a robust regulatory framework overseen by the Financial Conduct Authority, which applies responsible lending rules for consumers alongside a principles-based approach to business lending.
These are supported by wider macroprudential measures developed with the Bank of England. Consumer Duty has further reinforced the requirement for firms to deliver good outcomes for borrowers and to mitigate the risk of financial distress.
Earlier this year, the regulator issued updated guidance on affordability stress testing, including proposals affecting loan-to-income caps and the launch of a broader review of mortgage rules.
Separately, chancellor Rachel Reeves has said she wants to lift some limits on mortgages and simplify responsible lending and advice requirements, arguing that reform could help more people into homeownership while reopening debate around the balance between access to lending and default risk.
Pete O’Connor, chief executive of Target Group, said: “Recent discussions have explored the balance between robust regulation and access to lending.
“Those policy debates are ongoing with some proposals suggesting a potential rollback of post-financial crisis mortgage rules to boost homeownership and economic growth.
“The drivers behind the proposed changes to mortgage rules must be balanced against the need to protect consumers and maintain financial stability.
“Consumer Duty remains central to our thinking and any relaxation must not compromise borrower outcomes or data integrity.
“Collaboration between regulators, lenders and tech providers will be key to balancing access with stability. Rolling back post-financial crisis regulation could see riskier lending and one potential outcome is greater arrears and, ultimately, a rise in the number possessions.
“Collections teams will need to be strengthened in terms of headcount and technological sophistication. As a servicing partner, we see the sector’s need for agile systems – platforms that are capable of adapting to these shifts in scrutiny – is set to grow.”
Separate polling carried out by Landbay over the summer points to continued caution among intermediaries. Just 16% of brokers surveyed felt that proposed reforms would benefit first-time buyers, while only 7% believed they would kick-start market growth. Around a third of brokers said the changes could result in riskier lending.
