2025: a year of lessons, signs of strain, and the need to stay close to clients – Murphy

Which is not to say things won’t change radically in the future, but let’s work forward from where we are now.

Over the last year, rates steadied, buyers returned, and first-time buyers in particular pushed ahead after a long spell of waiting. Then the pre-Budget period happened and we had a totally unnecessary period of uncertainty. But that is now over, so we might anticipate a degree of suppressed demand being unleashed.

However, the year also showed where the strain sits and where advisers need to sharpen their focus for the months and years ahead.

Remortgaging grew again as borrowers came off fixes taken in the aftermath of the mini Budget. That brought more choice back into play, which in turn highlighted how uneven lender systems still are. Some handled demand well, others did not.

Delays, erratic processing times, and poor communication remained too common. On top of that, down valuations rose sharply early in the year. Advisers continue to spend time dealing with low values that appear to have no link to market evidence, which does nothing for consumer confidence.

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All of this has shaped the way advisers should now look at 2026. The message is simple. We need to make sure the sector does not drift back into old habits or accept poor practice as part of the deal. We should expect more, and we should say so plainly.

A year when lender behaviour became far clearer

Perhaps the most striking thread of 2025 was, however, the open shift in some lenders’ behaviour, particularly what we might call the big players. Many went much harder on direct channels, especially around product transfers (PTs) and retention. Borrowers were hit with early emails, slick prompts, and very simple click-throughs. And of course, no advice.

We can all see why this is happening. If lenders believe they can secure business without the adviser margin, they will try. It feels disrespectful to advisers and our clients, but that is the reality of shareholder-driven firms. A number no longer appears to hide the fact that they want to keep more of their own existing book without paying advisers.

This has added a new pressure point for advisory firms when the client clicks the PT button and bypasses advice.

One mention only, but it is worth saying: in times like these, many advisers value the protection that comes with being part of something bigger than themselves. That network umbrella, for example, can also be a comfort blanket in terms of how firms tackle this issue, and importantly, how they make up for any lost income due to this. It may well be worth considering in the new year.

Regulatory action on the horizon

We ended the year with the Financial Conduct Authority (FCA) having published its FS25/6 roadmap for the mortgage market. Rather than a surprise consultation before Christmas, we now know the next major steps planned for 2026 and beyond.

This matters. Advisers need space to read, think, and respond properly. FS25/6 confirms the regulator is looking at core parts of the market, including risk limits, later life lending, interest-only, product design, and customer journeys. These are not minor rule changes. They go to the heart of how advice works.

The direction of travel is also a little clearer, with the positive news that there will be no enhanced advice, and the regulator says it is committed to holistic advice. It will be judged now on deed and action rather than words, because despite this, we still saw the advice interaction trigger removed last year and a more relaxed stance on lender-led and digital journeys.

However, we have seen openness to changes in how qualifications and advice standards are framed, plus a commitment to move away from silos and not create new ones. FS25/6 shows this thinking will now be taken forward in stages and we all await the consultations that will kick off on these elements.

Lessons for advisers to take in 2026

The first lesson is simple: stay alert to lender intent. When a lender cuts PT fees, pushes click-through journeys, or tightens its grip on retention, it tells you something about where you sit in its plans. Advisers should not ignore these signals.

The second is the need to keep pressing for standards, whether on valuations, product pull notices, or basic service levels. When advisers challenge poor practice, things change. When we do not, they rarely improve.

The third lesson is about the client relationship. If lenders want to move closer to the borrower, advisers must move closer still. This means more contact, better explanations, and stronger reminders about the value of advice. Clients will only resist direct prompts if they understand what they lose by taking this route.

Starting the year on the front foot

For all the challenges, there is cause for optimism. Demand is there. Buyers are motivated. Product pricing has moved recently and looks set to ease further. And advisers remain the most trusted part of the homebuying process.

The call to action is clear. Stay close to clients. Tighten contact. Keep explaining the importance of advice. Make sure you’re offering a full range of ancillary services such as estate planning, protection, wealth, and legal – all client needs.

Advisers need to make themselves ‘holistic financial planning hubs’, signposting clients to the best solutions. If we all follow that route, then 2026 should be a great year for all.