The Bank of England and the Financial Conduct Authority have permanently removed the 15 percent firm-level cap on high loan-to-income mortgage lending, with the relaxed regime taking effect on 28 October 2026.
The change was confirmed in policy statement PS19/26, published on 14 October. It scraps the rule that stopped individual lenders from writing more than 15 percent of new residential mortgages at income multiples of 4.5 times earnings or above. In its place, the Prudential Regulation Authority and the FCA will use a rolling four-quarter measure to track high-LTI flows and decide whether lenders need to rein lending in.
Landlords who borrow in personal names will feel the effects first, because residential affordability calculations feed directly into deposits, let-to-buy deals and personal guarantees behind portfolio borrowing. The regulators will also publish aggregate market data on high-LTI lending so firms can see trends and adjust before intervention becomes necessary.
What changes on 28 October
From 28 October, the individual directions that enforced the 15 percent limit on each firm will cease. Lenders that already applied for permission to exceed the old threshold do not need to take further action. Supervisory statements and FCA general guidance have been amended to reflect the new approach and to spell out more clearly when the regulators expect firms to tighten up.
The Bank stressed that an overall market limit stays in place to guard financial stability and stop excessive household borrowing. The reform removes the per-firm ceiling rather than the system-wide backstop, which means lenders gain flexibility on how much high-LTI business they write while the authorities keep watch on total volumes.
Publishing the aggregate high-LTI flow figure, which began on 14 October, is designed to give firms an early read on market direction. Where flows run hot, the regulators can signal that adjustments are needed instead of relying on a hard cap that some lenders were already bumping against.
Buyer demand could strengthen into 2027
This follows Landlord Knowledge’s June report on the FCA mortgage rule review, which examined how looser affordability testing could widen the buyer pool. The latest move goes further by lifting a concrete quantity restriction, and it lands just as Moneyfacts data shows BTL five-year fixes topping 6 percent. Cheaper access to larger residential loans would support first-time buyer demand, which underpins the tenant exit routes landlords rely on when selling.
There is a timing point worth watching. The new system beds in during the autumn selling season, when the Bank’s policy statement says firms will be judged on rolling quarterly flows. Lenders keen to grow higher-multiple lending may move quickly, while cautious firms wait to see how the first published data reads.
What this means for landlords
- If you borrow personally: larger income multiples could lift what you can raise for deposits, let-to-buy purchases or personal guarantees behind limited-company debt.
- If you plan sales in 2027: stronger first-time buyer borrowing power should support demand for typical landlord disposal stock such as flats and smaller terraces.
- Watch for: lenders repricing higher-LTI deals in the run-up to 28 October, and the first published flow data which will show how aggressively firms use the new headroom.
- Bottom line: the cap removal does not cut rates, but it widens access to bigger loans at a moment when affordability testing has been the binding constraint for many buyers.
Editor’s view
Quantity caps were always a blunt tool, and removing the per-firm limit is a sensible admission of that. Landlords should read this as buyer-market support rather than a borrowing green light: the market-wide guardrail remains, and rates still do the heavy lifting on what people can actually pay.
Author: Editorial Team – UK landlord & buy-to-let news, policy, and finance
Published: 15 October 2026
Sources: Bank of England, Prudential Regulation Authority, Financial Conduct Authority
Related reading: Moneyfacts: BTL five-year fixes top 6% as rates climb
