Guidance of the wise: Rules that protect, judgement that delivers – Beavis

For me, these words capture a timeless truth about regulation: protect people from foreseeable harm. Don’t replace judgement. 

This year, the dial has started to move. And, for now at least, the system looks more joined up. 

At a recent Financial Conduct Authority (FCA) event, two things struck me. First, the seniority in the room, including FCA chief Nikhil Rathi and Chancellor Rachel Reeves. Second, the uniformity of language around growth. “Regulation for growth, not just for risk” was the constant refrain (I counted at least four of these from the Chancellor) as we saw government and regulators on the same stage, page, and message. The launch of a joint FCA and Prudential Regulation Authority (PRA) Scale-up Unit underlined that direction of travel. 

But if the brief from the top is clear, the road to delivery is less so. How can the PRA and FCA protect markets and consumers while removing red tape and lighting the blue touchpaper for growth? 

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Likely overhaul of the mortgage market 

On the FCA side, the Mortgage Rule Review (CP25/11) took a first step in July.

Dead wood removed. More room to act. In plain English, it is now easier to switch to a new lender, to cut total interest by shortening the mortgage term, and, more controversially, to discuss options before deciding whether advice is needed. These changes are already live.

They matter on the frontline where borrowers are trying to save money and get on with their lives. 

But let’s be honest about the trade-offs. Industry bodies have welcomed momentum while flagging risks. The Association of Mortgage Intermediaries (AMI) warns that stripping out the “interactive dialogue” trigger could blur the line between advised and non-advised journeys and weaken the role of intermediaries for vulnerable customers. There is also, rightly, concern about unleashing artificial intelligence (AI) in the advice market without the right guardrails. 

UK Finance supports widening sustainable access but also stresses sequencing and guard rails. It backs easing where data supports it, urge regulators to measure the impact of recent stress tests and loan-to-income (LTI) flex before going further, and warn against creating a new generation of property prisoners if emerging higher-risk segments scale without enough choice or end-of-term switching options. 

Both trade bodies are waiting, with bated breath, for the outcome of the Mortgage Rule Review (DP25/2) consultation. 

On the prudential side, the PRA shifted the Basel 3.1 start date to 1 January 2027. This should mean fewer near-term cliff edges in risk-weighted assets and reporting, more time to recalibrate models and pricing, and extra thinking time to consider the implications for risk appetite and product design. Elsewhere, the ‘Strong and Simple Framework’ for deposit-takers with assets under £20bn should free up much-needed capital to support the innovative lending these smaller banks and building societies provide on the edges of our market. 

But perhaps most interestingly, the government itself is now on the pitch, intervening in the part of the market where friction is felt most acutely. The home buying and selling consultation opened in October and runs to 29 December 2025.

Upfront information, clearer standards for agents, and a serious push on digital connectivity. If we get this right, chains shorten, fall-throughs drop, and everyone involved in the value chain (estate agents, brokers, lenders, insurers, surveyors, conveyancers, and, of course, consumers) spends much less time chasing paper. 

If you haven’t already, I’d urge you to respond and get involved with the push for growth. This is the moment to rip up the floorboards and finally fix the Victorian plumbing. 

Rules protect from foreseeable harm; judgment delivers progress. The government is asking for growth. The FCA and PRA are finally clearing space.

Our job is simple: use it well and prove it works. That is the guidance of the wise.