High loan-to-income lending loses firm-level 15 percent cap
The Prudential Regulation Authority (PRA) has removed the firm-specific cap on high loan-to-income mortgage lending. Lenders gain flexibility, while the Financial Policy Committee's aggregate 15 percent limit remains.
Lender flexibility within aggregate limits
PS19/26, published on October 14, 2026, finalizes policy following CP6/26 and removes the firm-specific 15 percent cap on high loan-to-income (LTI) lending.
Lenders can set high LTI strategies according to their risk appetite and business models, while the PRA aims to keep aggregate lending consistent with the Financial Policy Committee's 15 percent limit.
Following consultation feedback, the PRA will measure individual firms' high LTI flows and required adjustments over a rolling four-quarter period.
Aggregate monitoring remains quarterly, and the PRA will publish aggregate high LTI flows each quarter.
New governance and risk management expectations accompany the change.
The rules and supervisory statement took effect on October 28, 2026.
Accountability and thresholds under review
CP14/26, dated October 22, proposes a more flexible, proportionate and streamlined Senior Managers and Certification Regime while retaining senior decision makers' accountability.
Introduced in 2016, it draws on lessons from the 2008 financial crisis.
CP13/26, dated October 7, proposes automatic updates to in-scope regulatory thresholds every five years, starting July 1, 2031.
A transparent, rules-based framework would replace ad hoc, policy-by-policy maintenance with a predictable cross-policy methodology.
Both consultations form part of the October 2026 digest.
AI evidence, not prescriptions
The Bank of England and Financial Conduct Authority published their fourth AI and machine-learning survey on October 26, 2026.
It describes firms' use, plans, governance and management, plus perceived benefits, risks and constraints.
The aggregate results document respondents' practices rather than prescribe policy.
Source: PRA Regulatory Digest – October 2026
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