Overview

• The Financial Conduct Authority under chief executive Nikhil Rathi has opened a review of the mortgage charter in response to government feedback on reducing regulatory burdens.
• Introduced in 2023 after UK interest rates hit 5.25 percent, the charter offered borrowers a 12-month repossession moratorium and allowed six-month switches to interest-only or extended terms without fresh affordability checks.
• Chancellor Rachel Reeves argues that post-crisis consumer protections have overemphasized risk management and are hindering lending and investment.
• Rathi suggested that the existing consumer duty may duplicate the charter’s safeguards now that repossession rates have fallen.
• Housing advocates warn that retiring the charter could expose vulnerable homeowners to increased repossession risks without a comparable safety net.