Weekly intelligence for mortgage professionals, compiled by Paul Brett.
Lead Story: FCA Chief Signals a New Era for Mortgage and Retirement Advice
On 20 March 2026, FCA Chief Executive Nikhil Rathi delivered what is likely to prove one of the most consequential speeches for mortgage professionals in recent years. Speaking at the JP Morgan Pensions and Savings Symposium, Rathi made clear that the FCA views the traditional separation of pensions, housing, and savings as an outdated model, one that is leaving consumers underserved and advisers operating in silos.
The speech, titled ‘How Technology is Changing the Pensions Conversation’, was ostensibly about pensions and technology. The implications for the mortgage market were hard to miss.
A shift in how the FCA thinks about risk
Rathi used the mortgage market to illustrate the FCA’s evolving stance on risk. He pointed to the earlier guidance change on affordability stress testing, noting that 85% of lenders have since updated their approach, enabling them to offer around £30,000 more to many borrowers, with a sharp increase in first-time buyer purchase volumes as a result.
Housing wealth and retirement planning are now directly connected in the FCA’s thinking. For most UK households, around 80% of retirement wealth sits in pensions and housing combined. Products like lifetime mortgages and retirement interest-only mortgages are no longer niche — they are increasingly central to how the UK will fund its retirement.
Rathi also raised, with care, the prospect of pension pots being used toward first home purchases, noting that Australia, New Zealand, the United States, Singapore and South Africa already permit this.
Technology and AI featured prominently. Lloyds Banking Group research indicates that over half of UK adults are already using AI to help manage their finances, with around 40% using it for retirement planning. The FCA encouraged firms to use its Innovation Pathways, Sandboxes and AI Live Testing to trial new approaches safely.
For brokers, this speech is a clear signal of direction. The FCA is moving toward a genuinely holistic model of financial advice, and those who begin integrating later life lending and retirement income thinking into their conversations now will be well positioned as the market evolves.
Bank of England Holds at 3.75% as Rate Cut Timeline Shifts
The Monetary Policy Committee voted unanimously on 19 March to hold Bank Rate at 3.75%. The decision itself was not a surprise, but the tone of the accompanying statement was more cautious than the market had anticipated.
The conflict in the Middle East has pushed global energy prices higher, and the MPC now expects CPI inflation to rise to between 3.0% and 3.5% over the next couple of quarters, up from the 3.0% recorded in January 2026. Markets have responded by pushing back expectations for the next rate cut. A May reduction, which had been widely priced in at the start of the month, now looks considerably less certain.
For clients who were waiting for rates to fall before choosing a fixed deal, this is an important moment to revisit that assumption.
Rates on the Move: Swap Volatility Drives Wave of Lender Repricing
The geopolitical uncertainty has had a rapid and visible impact on mortgage pricing. In the week to 20 March, two- and five-year swap rates moved sharply higher, triggering widespread product withdrawals and upward repricings across the major lenders. In a 48-hour period alone, nearly 500 residential mortgage products were withdrawn.
Key lender moves this week
- Nationwide: selected fixed rates increased by up to 0.35% across new and existing business ranges.
- Barclays: 0.15% increase across its existing residential mortgage range.
- Halifax: remortgage fixed rates up 0.15%, purchase fixed rates up 0.10%.
- HSBC: broad-based increases across residential and buy-to-let products, effective 23 March.
- Coventry Building Society: withdrew selected rates for new customers with no immediate replacements.
- Clydesdale Bank: withdrew residential fixed-rate deals.
- Leeds Building Society: selected residential and interest-only fixed rates withdrawn and repriced.
The average two-year fixed rate has risen from 4.84% at the start of March to approximately 5.28-5.35% by the end of the week. The average five-year fix has moved from 4.96% to 5.32%. The cheapest available two-year fixes, which started the month below 3.60%, are now priced at around 4.14%, with five-year deals at approximately 4.24%.
Many of the withdrawn products are expected to return within days, repriced at higher levels. Brokers should treat any live pipeline cases with urgency, particularly where clients are approaching a decision window or a product transfer deadline.
FCA Launches Formal Later Life Lending Market Study
In a move that sits squarely alongside Nikhil Rathi’s speech, the FCA published the Terms of Reference for a formal market study into later life lending on 20 March 2026. The study focuses on the lifetime mortgage and retirement interest-only markets, examining whether competition is working effectively to deliver good consumer outcomes.
The FCA will look at three core questions: whether barriers to entry are limiting the number of providers; whether existing regulatory rules may inadvertently be inhibiting product development; and how consumers currently make decisions in this space.
The FCA is inviting written responses on the scope of the study by 17 April 2026, with a policy statement expected in the second half of the year. Brokers with clients in or approaching later life should engage with this consultation. The outcomes are likely to reshape the regulatory and commercial landscape for equity release, RIOs, and adjacent products for years to come.
MFS Collapse: FCA Opens Formal Investigation into £1.3bn Scandal
The fallout from the collapse of Market Financial Solutions (MFS) intensified this week, with the FCA confirming a formal investigation into the firm on 20 March 2026.
MFS, which positioned itself as one of the UK’s largest providers of short-term bridging loans, collapsed on 25 February 2026 with a creditor shortfall reported at a minimum of £1.3 billion. The core fraud allegation centres on ‘double pledging’ — the use of the same property assets as security for multiple loans simultaneously. The FCA probe focuses on potential anti-money laundering failures.
The case is significant beyond the headline numbers. MFS operated largely outside the FCA’s regulatory perimeter because it did not issue conventional homeowner loans or hold consumer deposits. Its collapse has exposed a genuine gap in oversight of non-bank lending, and the FCA is now under pressure to address it.
For mainstream mortgage brokers the direct impact is limited. The case is nonetheless a reminder that the broader credit and property ecosystem is more interconnected than it often appears, and that regulatory blind spots can carry systemic consequences.
Housing Market: Supply Improving, Sentiment Softening
The spring market has arrived with more stock than in recent years, but buyer confidence is showing signs of wavering as mortgage rates have moved higher through the second half of the month.
Year-to-date, 362,000 new properties came to market, running 1.2% ahead of 2025, 8.7% above 2024, and 20% higher than the 2017-2019 average. Sales agreed (246,000 year-to-date) are running 3% below 2025 but remain 8.4% ahead of 2024.
First-time buyer indicators remain broadly positive. Hometrack estimates that 40% of homes for sale are now cheaper to buy on a monthly basis than to rent locally, up from 25% a year ago. Mortgage repayments for a typical first-time buyer represent around 32% of take-home pay, close to the long-run average of 30%. However, the affordability equation becomes less favourable quickly if rates continue to rise.
The cautious optimism that characterised the start of 2026 has softened as geopolitical uncertainty has risen. The spring season remains active, but its momentum is more fragile than it looked three weeks ago.
What to Watch This Week
- Swap rate movements and further lender repricing. HSBC’s new rates take effect 23 March.
- FCA Later Life Lending Market Study: submissions open, deadline 17 April 2026.
- Further developments in the FCA/MFS investigation.
- Affordability rule change proposals from the FCA, expected imminently following references in the Rathi speech.
- Spring housing market volumes: will the rate spike weaken activity heading into the Easter period?
