Its nine-point plan details how the organisation can assist the government and private sector, building on reforms already announced by regulators and the state.
It said the government’s growth agenda would be judged on how it delivered competitive mortgage rates, supported the building of new homes, made energy bills affordable, made households more resilient and offered more support to businesses.
UK Finance said that the Financial Policy Committee’s (FPC’s) plan to review the Tier 1 capital benchmark was welcomed, but only if it meant reduced capital stacks for individual banks. It said lower capital requirements would lower the cost of lending, thereby improving mortgage rates and access to lending for households and SME.
It said the reforms to the redress process should be prioritised to resolve uncertainty that fed into product costs, constrained access to credit and restricted innovation. It said a more predictable and efficient framework would mean faster resolution for consumers and more confidence for firms to invest, innovate and serve consumer needs.
UK Finance said the progress of recent mortgage rule changes was already evident by the 18% rise in first-time buyer numbers in 2025, a result of loan-to-income (LTI) adjustments. It said the Financial Conduct Authority’s (FCA’s) Mortgage Rule Review needed to go further and address rules implemented to suit a different era, and support borrowers at all stages of life.
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It said the government should address home buying and selling transactions to limit the failure rate of transactions. It added that extending homeownership to more people and reducing the number of collapsed transactions would unlock a £10bn retrofit opportunity each year, supporting 200,000 jobs and reducing household energy bills by around £2bn-3bn each year.
Going further with reforms
UK Finance said the Mortgage Rule Review needed to be accelerated and focused on “bold reforms”, saying the FCA’s consultations needed to be “ambitious”. It said this should include reform of interest-only rules to widen the acceptance of repayment strategies and make retirement interest-only more accessible.
It also said the Prudential Regulation Authority (PRA) and FCA needed to conclude their consultation and proposals around the LTI flow limit so lenders could have the freedom to serve creditworthy borrowers at higher income multiples.
It also called on the government to publish and introduce a roadmap on how financial services would support home buying and selling reforms “without delay”, and implement its green and retrofit finance framework with recommendations to be introduced by the end of 2027.
David Postings, chief executive of UK Finance, said: “The government has outlined a clear and ambitious direction for economic growth, and banking and finance sit right at the heart of the push for growth. UK Finance and our members have helped shape a financial services reform agenda that is already showing results.
“The priority now is to focus on delivery, which will strengthen the sector’s contribution to supporting people, businesses, and communities across the UK.”
