Shaping the future: AMI responds to FCA mortgage discussion paper

AMI has now submitted our response to the FCA's Mortgage Discussion Paper; read our key messages to the FCA and read our response in full...

Advice isn’t optional, it’s the mortgage market’s future

AMI Chief Executive Stephanie Charman discusses AMI's response to the FCA's latest discussion paper and the value of advice for Mortgage Strategy magazine...

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Your August 2025 industry update

AMI's August 2025 update; what's new across the mortgage industry this month, including regulatory updates and industry initiatives...

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AMI Head of Policy Stacy Penn on how the UK mortgage market is evolving through regulatory reforms, tech advances and changing consumer expectations...
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Shaping the future: AMI responds to FCA mortgage discussion paper

AMI has now submitted our response to the FCA's Mortgage Discussion Paper; read our key messages to the FCA and read our response in full...

Advice isn’t optional, it’s the mortgage market’s future

AMI Chief Executive Stephanie Charman discusses AMI's response to the FCA's latest discussion paper and the value of advice for Mortgage Strategy magazine...

Your August ’25 update from AMI Chief Executive Stephanie Charman

AMI Chief Executive Stephanie Charman gives an update on what the team have been working on this month, and upcoming consultation deadlines...

Your August 2025 industry update

AMI's August 2025 update; what's new across the mortgage industry this month, including regulatory updates and industry initiatives...

Mortgage Sector in Focus; Stacy Penn writes for Moneyfacts

AMI Head of Policy Stacy Penn on how the UK mortgage market is evolving through regulatory reforms, tech advances and changing consumer expectations...

Advice isn’t optional, it’s the mortgage market’s future

Chief Executive Stephanie Charman writes about the FCA’s latest discussion paper and the importance of not overlooking the value of advice, in this article for Mortgage Strategy magazine.

Since this article was published, AMI has submitted its response to the discussion paper (DP25/2); you can find it, and our other responses in Our Response.

It’s been an interesting summer. While many people have been busy jetting off on their holidays, the FCA landed a hefty Discussion Paper (DP25/2) – The Future of the Mortgage Market.

At AMI, we’ve spent August dissecting and digesting its contents, working closely with our members to shape our response.

This paper sets out an ambitious agenda: support sustainable homeownership, strengthen responsible lending, future-proof later life lending, encourage consumer understanding, and drive innovation.

These are big themes, each substantial in their own right. As we consider affordability, product innovation, and evolving consumer needs, there is one element that must not be overlooked: the value of advice.

Some progress has already been made; lenders have reassessed affordability stress tests, and the Bank of England’s changes to loan-to-income flow limits have loosened restrictions on higher-LTV lending. But have these changes already had their intended effect? It feels too early to tell. And the timing of this paper raises an important question: are we in danger of moving too quickly, before the full benefits can be observed?

This is where advisers play a crucial role. On the front line, they see firsthand how borrowers respond to affordability pressures and product changes. More importantly, they know which solutions truly work in practice – which is why we’ve held numerous working groups with advisers to gain this insight.

Innovation is healthy, but it must reflect consumer needs.  A highly intermediated market gives lenders confidence to test these ideas safely. Intermediaries act as a crucial feedback filter for lenders, and this demonstrates how innovation and risk appetite can be balanced responsibly.

But innovation must also be aligned with wider action on housing policy. Supporting first-time buyers without addressing the current lack of housing stock will only fuel a supply vs demand imbalance, potentially undoing any positive steps forward.

The discussion paper places strong emphasis on later-life lending, highlighting two main concerns: buyers are entering the market later in life and taking longer terms that run into retirement, whilst recognising that older borrowers will increasingly need to access housing equity to fund retirement. Product development could form part of the solution, especially as we have products on the shelf today such as Retirement Interest-Only (RIOs) which remain underutilised due to restrictive criteria.

Most importantly, collaboration across the sector is essential and bridging the gap between mainstream and equity release advice is critical. The FCA proposes all advisers hold an equity release qualification, which could support more holistic advice and guidance. However, qualifications alone won’t guarantee good outcomes; what matters is ensuring consumers have access to advisers who can explain the full range of options or provide appropriate referrals.

The FCA is also considering whether disclosure requirements, such as the ESIS, should be simplified or even replaced. As a sector we should be mindful of the cost – both monetary and time – it would take to develop and implement a replacement. 

We would welcome a wider consultation on disclosure with consideration to streamlining through a consumer lens.  Let’s be mindful of oversimplification as it risks diminishing the advice process, potentially creating a space for easier implementation of execution-only models which could lead to poor consumer outcomes.

Perhaps most concerning is the paper’s suggestion that advisers often deliver a higher standard of advice than regulation requires and that this might justify splitting advice into “standard” and “enhanced” categories.  This is a dangerous path. Mortgage decisions are inherently complex, and consumers need trusted, consistent guidance. A two-tier advice system risks confusion, poor outcomes, and a race to the bottom.

One disappointing omission is any mention of the consumer need for protection. AMI’s own Viewpoint research shows a house purchase remains the number one trigger for protection sales. Ignoring the widening protection gap, while talking about the future of mortgages in isolation, feels foolish.

It’s worth noting that no article these days feels complete without a mention of AI. The paper raises the question: “What are the risks of AI-assisted advice?” As I have a limited word count for this article and given the predictability of our stance I won’t say too much but I suspect most readers already know where AMI stand and be assured our response will reflect this!

As AMI drafts its response, our priority is clear: to ensure the value of advice is not just acknowledged but embedded as the key success factor in the future of the mortgage sector.

© 2025 Association of Mortgage Intermediaries Limited.

AMI is the trading name of The Association of Mortgage Intermediaries Limited which is a company limited by guarantee, registered in England and Wales under the Companies Acts with number 7982341. Our registered address is Celixir House, Stratford Business & Technology Park, Innovation Way, Banbury Road, Stratford-upon-Avon, Warwickshire, CV37 7GZ.

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