The Push For Reduced Regulation

There’s no denying it — the mortgage market is changing. Quietly, steadily, and in some places, quite drastically. And as always, change creates opportunity — if you're paying attention.

Right now, we’re seeing a growing appetite for deregulation in financial services, including in the mortgage sector. Alongside this, lenders are starting to show more flexibility in how they assess affordability. Together, these changes could unlock lending for a broader range of borrowers, but they also mark a shift in how we, as brokers, need to show up for our clients.

It might feel like the current market is defined by restraint — high rates, reduced transaction volumes, and buyer hesitancy. But I’d argue that we’re actually at the beginning of a more creative, more pragmatic chapter in UK lending.

The Push for Deregulation — What’s Really Happening?

The mortgage market has changed more in the past few years than in the previous ten. High interest rates, sticky inflation, and affordability pressures have reshaped buyer behaviour — but they’ve also triggered something else: a rethink of how regulated, and how restrictive, our industry really needs to be.

Across both financial services and housing policy, there’s now a clear push toward deregulation. Whether it’s relaxing planning rules to get more homes built, or loosening affordability criteria to unlock lending, the aim is the same — remove the friction that’s holding people back.

We’ve spent years under the shadow of post-2008 regulation. Necessary? Absolutely. But in today’s climate, some of that structure may now be doing more harm than good — particularly when it comes to excluding borrowers who should be mortgage-ready. The old rules were built for a world of low inflation and low rates. That’s no longer the case.

Now, there’s talk (and action) around easing regulatory burdens — whether that’s through streamlining affordability checks, reducing red tape in product innovation, or allowing lenders to take a more case-by-case approach. This doesn’t mean a return to reckless lending — let’s be clear. But it does open the door to smarter, more nuanced decision-making.

For brokers, this presents a massive opportunity. The better we understand a client’s full financial picture, the more valuable we become. Gone are the days where a client with a 9-to-5 and a perfect credit score was the easiest win. Now, we’re guiding everything from tech freelancers to early-stage business owners — people with real earning potential, but not the most straightforward income profiles.

Affordability Criteria — A Subtle (But Significant) Shift

Alongside this is a noticeable softening in how affordability is assessed.

It started when the Bank of England scrapped the mortgage market stress test in 2022. At the time, it barely made a ripple. But fast-forward to now, and we’re seeing lenders slowly, but surely, recalibrating. The standard "3 percentage point" stress test is being replaced with more real-world calculations. Lenders are finally acknowledging that the cost of living looks different for everyone — and that not every borrower needs to be pushed to theoretical extremes.

Some lenders are getting sharper with their expenditure modelling. Others are showing a little more love to variable income, or taking a more modern view of things like shared parental leave, childcare costs or rental history as a proxy for mortgage payments.

It’s subtle, but it matters. Particularly for first-time buyers, self-employed applicants, or those working across multiple income streams. These people are often told “no” on paper, when in practice, they’re doing just fine.

This is where the broker comes in — not just to source the deal, but to advocate for it. To package the case in a way that makes sense. To use relationships, experience, and sometimes a bit of creative problem-solving. This is the part of broking that can’t be automated.

So, What Should Brokers Be Doing Right Now?

First, we need to stay on the front foot. These regulatory and affordability shifts aren’t just technical — they’re strategic. They change how products are designed, who they’re for, and what kind of advice matters most.

Brokers should be looking at their client base with fresh eyes. Who fell through the cracks before, but might now qualify? Who’s been putting off a move or refinance because the market "wasn’t right"? The criteria landscape is evolving — and it’s our job to connect the dots.

Second, we need to keep talking to lenders. If you haven’t updated your lender relationship playbook in the last six months, now’s the time. Some of the most competitive solutions out there right now aren’t on the rate tables — they’re in the policy nuances, in manual underwriting routes, or pilot schemes being tested before full rollout.

And finally, we need to champion the broker voice. As regulation loosens, we become even more important — not less. Our role isn’t diminished by flexibility; it’s magnified. Clients will need reassurance. Lenders will need well-prepared cases. And the market will need professionals who know how to tread the line between possibility and prudence.

Change always makes people nervous. But it also brings out the doers — the brokers, investors, and borrowers who see the angles others miss.

Deregulation isn’t a threat; it’s a recalibration. Affordability criteria aren’t disappearing; they’re maturing. And brokers? We’re not being sidelined — we’re being called up.

Filip Kraj

Associate Mortgage Broker