10 Skyline | Edition 8 | Winter 2025
Stacy Penn
Head of Policy Association of Mortgage Intermediaries
As we move into 2026, it’ s time to reflect on what was a busy summer and autumn. Back in July, the FCA landed a substantial Discussion Paper( DP25 / 2) entitled‘ The Future of the Mortgage Market’.
The breadth and depth of this paper – spanning areas as diverse as later life lending to disclosures and selling standards – signifies the importance of the mortgage intermediary sector as the FCA and Government aims to boost homeownership and growth. It marks an opportunity to help shape the future, with the paper representing the start of the process – we expect the FCA to issue consultations on more specific proposals in early 2026.
Throughout July and August, AMI digested and analysed the paper’ s contents, taking a collaborative approach with its members to ensure their views and real-life experiences were reflected in its final response. We engaged with the FCA, HM Treasury and other trade bodies to share views, identifying areas in which we are aligned and areas we perhaps are not.
There are ideas and concepts explored in the paper which AMI supports. A significant part of the paper focuses on later-life lending, with it highlighting two key challenges: firstly, the age of first-time buyers is rising and mortgage terms are increasing – 500,000 consumers took a term with 30 years or more in 2024 – meaning more will be naturally borrowing into retirement.
Secondly, demand for later life lending is likely to grow, as older borrowers consider whether accessing their housing solution is an option to help fund their retirement.
Therefore, bridging the gap between mainstream and equity release advice is critical. The FCA has proposed all advisers hold an equity release qualification, with the aim to support more holistic advice and guidance. AMI recognises the need to review the Level 3 CeMAP / CII mortgage qualification to ensure there is relevant later life lending content, particularly to ensure advisers are equipped with practical, real-world knowledge. We believe that including modules on later life lending and lifetime mortgages would provide advisers with the relevant knowledge to develop a broader understanding of later life lending solutions, to provide a better holistic approach to their advice models. AMI has called on the FCA to launch a consultation to explore the various options in this area; whether this is retiring the standalone CeRER qualification or exploring the role ongoing CPD plays. Whilst qualifications play an important role, this alone won’ t guarantee good consumer outcomes. What is more important is ensuring consumers can access advisers that have awareness of the full range of options and can provide appropriate signposting where appropriate.
The FCA paper repeatedly highlights innovation. While innovation is valuable and can be part of the solution in the later life market, it is important not to overlook opportunities to improve existing products. For instance, Retirement Interest Only( RIO) mortgages remain underutilised, largely due to restrictive criteria such as the‘ first death’ affordability check. Equally, the role of the intermediary market in enabling innovation and product development should not be underestimated. We have seen lenders adjust their risk appetite and introduce solutions – such as 100 % LTV mortgages – exclusively through intermediaries, demonstrating how a highly intermediated market gives lenders the confidence to test new ideas safely. Policymakers should therefore remain mindful of this broader role, especially where policy changes risk reducing consumer awareness and access to advice.
REVIEW
AMI is supportive of FCA proposals to review disclosure requirements. There are elements of the ESIS that are not fit for purpose and should be reviewed to improve consumer understanding. Many have called for the sector to revert to the KFI – it’ s important we are mindful of cost – both monetary and time – in doing so which could be better invested into areas such as product development.