On 14 October 2026, the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) issued Policy Statement 19/26 26/20: High loan to income lending (PS19/26).
Background
On 1 April 2026, the PRA and FCA jointly published a Consultation Paper on high loan to income lending following a recommendation that the Financial Policy Committee (FPC) issued in July 2025 that the regulators amend implementation of their loan to income (LTI) flow limit to allow individual lenders to increase their share of high LTI lending while aiming to ensure the aggregate flow remains consistent with the 15% limit. The proposals in the Consultation Paper included removing the current 15% high LTI flow limit for individual firms from PRA rules and FCA general guidance. The deadline for comments on the Consultation Paper was 1 July 2026.
Policy Statement
In the Policy Statement now published the regulators set out their feedback to the responses to the Consultation Paper and set out their final policy, as follows:
- Amendment to the Housing Part of the PRA Rulebook (Appendix 1).
- New PRA supervisory statement 2/26 – High loan to income lending (Appendix 2).
- New FCA general guidance (Appendix 3), to replace the FCA’s guidance initially issued in October 2014 (FG14/8) and revised in February 2017 (FG17/2) and July 2025 (FG25/4).
The regulators’ policy removes the firm-specific 15% cap and provides lenders with greater flexibility to determine their individual high LTI lending strategies, in line with their risk appetite and business models. While the aggregate high LTI flow is within a level consistent with the FPC’s recommended 15% limit, lenders are able to lend above that level.
The regulators have amended the final policy such that the way a firm’s high LTI flow, and expectations for any adjustment in lenders’ high LTI flows, are measured on a rolling four-quarter basis. However, as consulted on, the regulators will use a single-calendar-quarter measure to monitor the aggregate high LTI flow and to inform judgements on consistency with the FPC aggregate limit. The regulators have also clarified that they will publish additional data alongside the quarterly aggregate high LTI flow measure to provide lenders with more visibility of trends in the mortgage market.
Next steps
The PRA’s rules and Supervisory Statement will commence on 28 October 2026.
The FCA’s general guidance will come into effect and replace the FCA’s general guidance on 28 October 2026.
For firms using the interim measures made available by the regulators, either having consented to the PRA’s modification by consent or applied for FCA individual guidance, no actions will be needed because the relevant directions will automatically fall away on 28 October 2026.
The PRA will publish the aggregate flow of high LTI on its website alongside supporting information for 2026 Q3 in 2026 Q4.