A third of lenders expect to see regulatory scrutiny ease in 2026, according to new research from Target Group.
Earlier this month, at the Future of Mortgage Servicing conference 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% of lenders thought regulatory scrutiny would ease in 2026. While 35% said they didn’t expect any changes, the remainder said they thought it was set to intensify.
The 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, 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.”
