UK lenders are no longer bound by a firm-level 15% cap on high loan-to-income mortgages from 28 October, under PRA policy statement PS19/26, while a 15% limit across the market as a whole is retained.
From 28 October 2026, UK mortgage lenders are no longer subject to a firm-specific cap on high loan-to-income lending, under Prudential Regulation Authority policy statement PS19/26 and accompanying Financial Conduct Authority guidance. The regulators removed the rule that limited each firm to 15% of new residential mortgages at loan-to-income ratios of 4.5 times income or more, while keeping a 15% ceiling across the market as a whole.
The change implements a recommendation the Bank of England's Financial Policy Committee made in July 2025, to let individual lenders increase their share of high loan-to-income lending while aiming to keep the aggregate flow consistent with the 15% limit. A firm's high loan-to-income flow will now be measured on a rolling four-quarter basis, while the aggregate will be monitored each calendar quarter and published by the PRA each quarter. If the aggregate becomes inconsistent with the limit, the regulators may expect firms to gradually reduce their share back towards 15% in a smooth and predictable way.
The policy statement, opened and read in full, confirms the 28 October commencement, the removal of the firm-level cap, the retained aggregate limit, the measurement bases and the July 2025 committee recommendation. The change does not require lenders to lend more, and affordability and credit checks are unchanged, according to corroborating coverage of the new rules.
The regulators expect the change to lead to greater use of the aggregate limit and increased competition, as firms gain flexibility to set their own risk appetite for high loan-to-income lending and pursue a broader range of business models. They also expect it may increase homeownership rates, noting that first-time buyers have accounted for an increasing share of high loan-to-income lending.
For borrowers, the practical effect will depend on whether lenders use the new room: the cap that bound each firm individually is gone, but the market-wide ceiling and the threat of a forced gradual reduction remain. The first quarterly aggregate publication, for the third quarter of 2026, will show how far lenders have already moved under the new framework.