A small rise in non-advised mortgage sales could have much bigger consequences – Murphy

According to figures recently published in Mortgage Solutions, non-advised mortgage sales increased from 2.6% in 2024 to 3.3% in 2025, while the proportion of mortgage sales conducted through intermediaries moved in the opposite direction, falling, albeit slightly, from 84% to 83%.

Those percentage-point movements might appear marginal and should not send a ripple of fear through the advisory community, but the increase in the non-advised share is actually almost 27%, and as we know, it comes during a year in which the FCA removed the mortgage advice interaction trigger, allowing lenders to have far greater interaction with customers without that automatically becoming an advised process.

An early warning rather than firm evidence?

We have to be careful here because the FCA rule change only took effect in July 2025, meaning these annual figures cover little more than five months under the new regime, and we cannot say with 100% certainty that the regulatory change caused the increase in non-advised sales.

However, we can surely ask whether we are beginning to see the first signs of the consequences, particularly given the FCA itself said the change would allow easier interactions between firms and customers without immediately triggering advice.

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As I have said previously, I have never been convinced removing the interaction trigger was in consumers’ best interests, particularly when you consider who stood to benefit commercially from being able to have far more extensive conversations with existing customers without providing advice.

Was this genuinely a consumer-focused regulatory change that had been completely thought through, including all the potential consequences, or was there an element of the regulator capitulating to lender demands for greater freedom to deal directly with their customers?

Because, let’s be frank, lenders have a significant financial incentive to retain customers directly, reduce the costs involved in servicing them and avoid paying intermediary procuration fees, while advisers have always provided the uncomfortable possibility that, having reviewed the whole situation, they might recommend the customer moves somewhere else.

I’ve written before about some lenders’ approach to product transfers (PTs) and the assumption that existing customers will simply remain where they are, when an adviser reviewing that client’s circumstances might find a considerably better option elsewhere.

Advice protection matters

There is also a far more important issue here than intermediary market share, because every increase in execution-only business means more borrowers making mortgage decisions without the protection of a suitability assessment.

Indeed, the FCA rules require customers who have had interactive dialogue before proceeding to execution-only to positively confirm they understand the consequences of losing the protection provided by the suitability rules.

That feels particularly relevant for all borrowers, but perhaps even more so for first-time buyers, who are making the biggest financial commitment of their lives, often without previous experience of mortgage products, lender criteria, affordability considerations or the many other factors that should determine what constitutes the right mortgage for them.

Paradigm has been campaigning for mandatory mortgage advice for first-time buyers, arguing that removing the interaction trigger has actually reduced the advice safety net for precisely this group, and I think these latest figures should add further weight to what is already a very strong argument.

We don’t know from these figures whether more first-time buyers are proceeding without advice, so it would be wrong to claim they are, but surely we should now be asking the FCA for that information and watching those numbers incredibly closely.

What happens next matters

There is a wider regulatory direction here that should concern the advice profession, because we continue to hear about removing rules, increasing flexibility, supporting growth and making it easier for consumers to access mortgages, all of which sound perfectly reasonable, but we also have to consider what those changes actually mean for individual borrowers.

The FCA itself said when announcing these changes that it expected many borrowers to continue benefiting from regulated mortgage advice. Well, now we need to see whether that expectation proves correct.

The 2025 numbers are far too early to provide a definitive answer, but if non-advised sales continue rising throughout 2026 – the first full calendar year without the interaction trigger – while intermediary share continues falling, then it will become increasingly difficult to dismiss this as mere statistical noise.

And, at that point, the question for the FCA should not simply be whether its changes have made mortgages easier or cheaper for lenders to distribute directly, but whether more consumers are making major financial decisions without advice and without the suitability protections that come with it.

Regulatory decisions have real-world consequences, and when someone’s home and potentially hundreds of thousands of pounds of borrowing are involved, we need to be absolutely certain those consequences have been properly considered.