The FCA and PRA have confirmed the permanent removal of the firm-level 15% cap on high loan-to-income mortgage lending, while retaining an overall market limit. This gives lenders more room to serve borrowers whose incomes support higher borrowing, particularly first-time buyers facing high house-price-to-earnings ratios.
For advisers, the change is an opportunity rather than a signal to treat affordability as secondary. Firms should update lender research, suitability processes and client communications to distinguish between greater lender flexibility and a guaranteed increase in borrowing capacity. AI-driven affordability and sourcing tools may help identify viable options quickly, but advisers will need clear human oversight of expenditure assumptions, foreseeable payment shocks and Consumer Duty outcomes.