Prudential Regulation // Policy statement 14 October 2026 PS19/26 – High loan to income lending PS19/26 – High loan to income lending

For compliance teams, this means revisiting LTI limits, affordability assessments, and lending policies to align with the new expectations. Firms should expect greater supervisory scrutiny of high-LTI flows, with potential restrictions on the proportion of new mortgages above specified LTI ratios. Boards must ensure risk appetite statements, capital planning, and stress testing reflect the revised framework.

Operational impacts include updating credit risk models, monitoring and reporting capabilities, and customer disclosure processes. Lenders may need to adjust product pricing, criteria, and distribution strategies, potentially reducing volumes in high-LTI segments. Smaller lenders and credit unions may face proportionality considerations, but all regulated mortgage providers should assess their exposure.

Actionable steps: (1) review and update LTI and affordability policies; (2) enhance data collection and reporting on LTI distributions; (3) engage with PRA/FCA supervisors on implementation timelines; (4) train lending and compliance staff; (5) consider capital and liquidity implications. Opportunities exist for lenders with conservative LTI profiles to differentiate on responsible lending, while RegTech providers can support automated LTI monitoring and regulatory reporting. Overall, this is a significant policy development requiring prompt board-level attention and cross-functional implementation.