TL;DR
The Financial Conduct Authority plans to encourage mortgage brokers to adopt AI as part of wider UK mortgage market reforms. The changes aim to help first-time buyers access the market and enable older homeowners to unlock housing wealth more easily.
AI for Better Advice
The FCA intends to encourage the use of data and technology, including AI, to help brokers “give better and faster advice while keeping a human touch.” The emphasis on maintaining human involvement suggests a balanced approach to automation in financial advice.
Broader Reform Agenda
The AI initiative sits within a comprehensive reform package. Key elements include:
- Simplified mortgage rules allowing more flexible products reflecting different working patterns and income levels
- Reviewed retirement interest-only requirements to improve accessibility
- Simpler advertising and disclosure rules for better online consumer understanding
- Secondary market study examining how to support innovation and fair value products
Wealth Unlocking Focus
David Geale, executive director for payments and digital finance, framed the reforms around a broader economic challenge: “Reforming the mortgage market can help address the fact that as a society we’re saving too little for later life, yet people have huge wealth tied up in property.”
Timeline
The FCA will begin public consultation on proposed rule changes from early 2026, with initial reforms expected later that year. A secondary market study’s terms of reference will be published in Q1 2025.
Looking Forward
For UK financial services firms, the FCA’s explicit encouragement of AI represents a notable regulatory signal. The “human touch” requirement suggests a supervised AI model rather than full automation—potentially creating opportunities for firms that can demonstrate effective human-AI collaboration in advice delivery.