The mortgage sector is witnessing a shift towards heightened governance and thorough scrutiny, aligning specialist lending with the industry’s evolving regulatory expectations driven by the FCA’s Consumer Duty regime.
There is a clear shift across the mortgage market towards tighter governance, stronger evidence and more careful scrutiny of lending decisions, and specialist lending is moving with it. In the Mortgage Solutions piece, Crystal chief executive Berry said the sector is seeing higher expectations on affordability, income checks, source of funds and the reasoning behind each loan, driven in part by the FCA’s Consumer Duty regime and its continuing focus on customer outcomes.
That regulatory backdrop matters. The FCA introduced Consumer Duty in July 2023 and later said in March 2025 that, while many firms had improved, some vulnerable customers were still experiencing poorer outcomes, particularly where more than one vulnerability factor was present. Industry commentary from Covington, Addleshaw Goddard and BDO in 2025 all pointed to the same conclusion: firms need better monitoring, stronger governance and more evidence that outcomes are genuinely improving, not merely that frameworks exist.
Berry argued that specialist lending is not being unfairly targeted so much as held to the same higher bar as the rest of the market. He said Crystal has responded by placing more weight on getting cases right first time, identifying issues earlier and presenting lenders with fuller, better organised applications. That, he said, can mean more work upfront, but it reduces underwriting queries and can shorten the overall route to a lending decision.
That view is consistent with what advisers and lenders are hearing elsewhere in the market. TLT said in June 2026 that regulators are now judging Consumer Duty maturity by evidence of better customer outcomes, not by policy documents alone, and that firms face greater risk if they cannot show board challenge, decision-grade management information and effective remediation. In that context, Berry’s comments suggest specialist lending is becoming less about speed for its own sake and more about disciplined preparation, clearer lender dialogue and more robust support for customers whose circumstances fall outside mainstream criteria.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
