Lenders predict easing regulatory scrutiny in 2026
15 December 2025
- Mortgage regulation 2026: 35 per cent of mortgage leaders polled at the Future of Mortgage Servicing conference expect regulatory scrutiny to ease
Lenders see regulatory scrutiny easing in 2026, according to new research from Target Group.
Earlier this month, at the Future of Mortgage Servicing conference at the Belfry, which was hosted by Target Group and Phoebus Software, leaders from the mortgage industry were asked “Do you see regulatory scrutiny easing in 2026?”
The results of the poll, which saw the views of 100 c-suite mortgage professionals surveyed, found that 35 per cent of lenders thought regulatory scrutiny would ease in 2026. While 35 per cent said they didn’t expect any changes, the remainder said they thought it was set to intensify.
The Financial Conduct Authority (FCA) regulates riskier lending through robust responsible lending rules for consumers, a principles-based approach to business lending, and broader macroprudential measures in collaboration with the Bank of England. Consumer Duty reinforces the requirement for lenders to ensure good outcomes for borrowers and prevent financial distress.
Earlier this year, the FCA issued updated guidance on stress testing, proposing changes to the loan-to-income (LTI) cap and opening a review of mortgage rules. And Rachel Reeves, the Chancellor, has also said she wants to lift limits on mortgages, simplify responsible lending and advice rules for mortgages to support more into homeownership and open a discussion on the balance between access to lending and the level of defaults.
Pete O’Connor, the 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 ne
ed for agile systems – platforms that are capable of adapting to these shifts in scrutiny – is set to grow.”
Polling conducted by Landbay over the summer revealed only 16 per cent of brokers thought the reforms would be a boost to first-time buyers – and just 7 per cent thought the reforms would kick-start growth. But around a third of brokers thought the reforms proposed would lead to riskier loans.
Target Group, a leading provider of digital transformation, software and business process outsourcing (BPO). For further information about Target Group, please visit www.targetgroup.com.
