The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) have published CP6/25 consulting on increasing the de minimis threshold above which the mortgage Loan to Income (LTI) flow limit applies, following the Financial Policy Committee’s recommendation of November 2024. The proposal would raise the threshold from GBP 100 million to GBP 150 million of annual residential mortgage lending. The LTI flow limit requires mortgage lenders to cap new residential mortgage lending with an LTI ratio at, or above, 4.5 to no more than 15% of their total new mortgage loans per annum. Increasing the de minimis threshold would allow smaller lenders to extend more residential mortgage lending before becoming subject to the LTI flow limit, and would be implemented through amendments to the Housing Part of the PRA Rulebook and revisions to the FCA’s general guidance (initially issued as FG14/8 and revised as FG17/2). The consultation closes on 8 May 2025, with the FCA accepting responses on behalf of both regulators. After considering feedback, the FCA plans to issue revised final guidance and the PRA plans to publish a policy statement, with final guidance and rules intended to be in place in 2025 H2.
Prudential Regulation Authority 2025-04-03
Prudential Regulation Authority and Financial Conduct Authority consult on raising the mortgage loan to income flow limit de minimis threshold to GBP 150 million
The Prudential Regulation Authority and the Financial Conduct Authority are consulting on raising the de minimis threshold for the mortgage Loan to Income flow limit from GBP 100 million to GBP 150 million, following a Financial Policy Committee recommendation. This change would allow smaller lenders to increase residential mortgage lending before being subject to the LTI flow limit. The proposal involves amendments to the PRA Rulebook and revisions to the FCA’s guidance.