Month: June 2025

Landbay and Cotality have upgraded their technology interface to speed up the buy-to-let application process for brokers. A new Application Programming Interface (API), means that brokers will be able to submit cases directly via the buy-to-let hub. The lender says the change will improve accuracy, remove the need for manually keying of data and allow for faster stress-testing of portfolios. Landbay chief lending officer Paul Clampin says: “Landbay consistently strives to improve the predictability of the mortgage decisioning process while reducing the burden on our intermediary partners.  “The integration with Cotality will reduce the need to input information manually.  “Instead, information will be submitted directly into Landbay’s system. “This will automate the assessment of portfolio information with the key systems at Cotality.” Cotality chief operating officer Mark Blackwell says: “Integrating all our systems to mortgage lending operating platforms is creating a faster, more secure and seamless data journey for brokers and lenders.” Yesterday, Landbay reduced rates on a number of products. The post Landbay aims to speed up BTL cases with upgrade appeared first on Mortgage Strategy.

The Housing, Communities and Local Government (HCLG) Committee will question Angela Rayner MP, Deputy Prime Minister and Secretary of State for the Ministry of Housing, Communities and Local Government (MHCLG) on the Spending Review on 8 July. Commenting on the government’s cash injection into affordable housing Florence Eshalomi, chair of the HCLG committee said: “The Chancellor’s announcement of £39bn for affordable homes is welcome and will play an important role in efforts to deliver on the Government’s goal of building 1.5 million new homes in this Parliament.” She insisted that decades of failure to build the social homes needed, meant that a record 126,000 families faced the scourge of homelessness, spending years in so called ‘temporary accommodation’ while their health, work and education suffered. “We will be urging the Government to be clear on just how many social homes they expect this capital investment to deliver and whether they will set a target for Social Rent homes in the long-term housing strategy. “MHCLG has a busy and important agenda; supporting councils who are in a precarious financial state, on building safety, on leasehold and renters reform, and on tackling rough sleeping. Getting these things right is critical for people right across England, and there are concerns that the level of spending outlined in Spending Review may leave these areas without the support they need. “We look forward to questioning the Secretary of State on how the Spending Review will deliver on her Department’s priorities next month.” The post HCLG Committee to quiz Rayner on Spending Review appeared first on Mortgage Strategy.

Proposed changes to mortgage advice could cut intermediary fees by almost £120m, which brokers say raises the risk of more borrowers taking out the wrong products. The move comes from the Financial Conduct Authority, which says it wants to make buying home loans “easier, faster and cheaper”. The regulator’s Mortgage Rule Review: Consultation Paper CP25/11 says it plans to “simplify sectoral requirements” around four key areas. These cover mortgage advice as well as affordability rules for mortgage term reductions and remortgaging. The FCA must be mindful of unintended consequences of borrowers pursuing an execution-only route that may not deliver the best long-term solution The FCA also plans to retire two non-handbook rules on interest-only mortgage customers at risk of being unable to repay their loans, and guidance for firms supporting existing mortgage borrowers hit by rising living costs. But, not surprisingly, it is the watchdog’s proposals around advice that have raised concerns among brokers, while leaving lenders unperturbed. The FCA says it wants to make it easier for consumers to “engage with their mortgage provider without the firm having to provide mortgage advice when not needed”. Its main concern is product transfers, where it points out that 83% of the 1.6 million borrowers who remortgaged last year remained with the same lender. The product transfer market fell by 7% to £224bn in 2024, according to UK Finance data. The regulator wants to increase the use of execution-only sales in this area to lower borrowing costs. The real risk isn’t just how many this could affect but whether they’re making that choice with full understanding of what they’re giving up A study conducted by the watchdog in 2019 found that its current rules were “limiting” sophisticated consumers’ access to “execution-only options more than intended”. It added that lenders were not confident “in dealing with customers outside an advised process due to perceived regulatory risk”. It also pointed out that its rules in this area “were constraining innovation, particularly in the use of digital channels”. The regulator has laid out three scenarios that its broker fee changes may lead to. Its highest case is a 7.5% fall in home loans sold by intermediaries — around 97,000 mortgages — leading to a £95.1m fall in procuration fees and a £21.4m drop in consumer charges, adding up to £116.5m in lost fees. Its lowest case is a 1% fall in home loans sold by brokers — around 13,000 mortgages — leading to a £12.7m fall in procuration fees and a £2.8m drop in consumer charges, totalling £15.5m in lost fees. The BSA is supportive of any changes that simplify the process for consumers The watchdog said it would rely on lenders to use their “discretion” on which borrowers they sold execution-only loans to, adding that it “expects” lenders to “encourage consumers to take advice where they consider this will deliver good outcomes”. It added that its wide-ranging Consumer Duty rules, introduced in 2023, “would help ensure that consumers can make an informed choice on whether to transact without advice”. Connect Mortgages chief executive Liz Syms points out: “The FCA has stated this is not mandatory, so firms won’t be forced to change their models overnight. “But the reality is, once it removes the regulatory barrier, it opens the door for a significant shift in behaviour, especially among digital channels.” Syms adds: “If lenders start routing more consumers down execution-only, we could see advice rates drop significantly, particularly for simpler cases or among younger, digitally confident borrowers. “That said, many customers do actually want advice, so the real risk isn’t just how many this could affect but whether they’re making that choice with full understanding of what they’re giving up.” If lenders start routing more consumers down execution-only, we could see advice rates drop significantly Building Societies Association head of mortgages and housing Paul Broadhead says the body “is supportive of any changes that simplify the process for consumers”. He adds: “Up to now, any interaction with a lender, even for simple personalised enquiries, has required entering a fully advised process. We believe that, in the majority of cases, advice is the most appropriate route, ensuring that a borrower gets the right deal for them.” UK Finance director of mortgages Charles Roe says: “The new proposals allow lenders to consider where execution-only processes could save an informed customer time and enhance their remortgaging experience. “However, it is important that the FCA is mindful of the potential unintended consequences of borrowers pursuing an execution-only route that may not deliver the best long-term solution for their specific circumstances.” FCA chief executive Nikhil Rathi told the Treasury select committee in March that the basket of home loan rules it was relaxing involved “trade-offs”, which could see mortgage possessions rise from their relative low of around 1,000 a quarter. Once the FCA removes the regulatory barrier, it opens the door for a significant shift in behaviour, especially among digital channels Association of Mortgage Intermediaries (Ami) chief executive Stephanie Charman said last month that the FCA’s proposals “overlook the critical role of mortgage advisers”. She added that Ami was in talks with members, the regulator and other trade bodies to ensure “its voice is heard”. The FCA’s consultation closed on 4 June, with the watchdog planning to “quickly” issue a policy statement in the third quarter without an “implementation period”. Broker bodies do not have long to make their own voices heard. A new fee regime may be in place before the autumn. This article featured in the June 2025 edition of Mortgage Strategy. If you would like to subscribe to the monthly print or digital magazine, please click here. The post News Analysis: FCA poses £120m broker question   appeared first on Mortgage Strategy.

Suffolk Building Society has reduced its interest only residential products by up to 16 basis points. Rates have been reduced on the society’s 80% loan-to-value (LTV) residential five-year interest only from 5.25% to 5.09% for 60 months. In addition, the 80% residential two-year fixed interest only has been cut by 16bps to 4.99% until 31 August 2027. And the 80% LTV residential two-year discount interest only has been lowered by 15bps to 4.85% for 24 months. In addition, Suffolk has introduced a 90% LTV discount mortgage to help those with smaller deposits take advantage of the prospect of future Bank of England base rate drops. The 90% residential mortgage is a two-year deal available for purchase or remortgage. It has a discount rate of 4.95% and a maximum loan amount of £650k. Suffolk Building Society head of intermediaries Charlotte Grimshaw says: “With our changes to repayment vehicles, we decided to close the rate differential between our capital and interest, and our interest only products – giving people more choice.” “This helps borrowers who are looking to borrow into retirement, people currently on interest only terms, or those looking to migrate over to interest only.” Earlier this week, Suffolk relaxed its criteria for foreign nationals, expat borrowers and homeowners who want to downsize in the future. The post Suffolk lowers interest only resi products by as much as 16bps appeared first on Mortgage Strategy.

Larger houses in multiple occupation (HMOs) with more bedrooms generate higher yields for landlords than smaller ones despite costing more upfront, according to new data. The research also shows that Bradford is the city with the highest yields for HMO landlords in England. HMO management platform COHO found that across the country, smaller properties with three bedrooms generate an average yield of 7.1%. This is based on an average three-bed HMO asking price of £302,546 and an average monthly rental income of £593 per room – or £1,779 in total. Average yields on a four-bed HMO are stronger at 8.5%, because the rental income increases by proportionately more than the extra cost of buying a bigger property. For a four-bed HMO, the average asking price is £336,252, but the landlord makes an extra £593 per month – or £2,372 per month. Five and six-bedroom HMOs offer the highest yields at an average of 8.7% across England, the study found. But in many cities the yields are much higher. In Bradford, where the average price of a five or six bedroom HMO is just £228,750, the average rental income is £482 per room, giving a yield of 15.2%. In Liverpool, six-bed HMOs generate an average yield of 10.8%, while in Leicester it is 10.1%. COHO chief executive Vann Vogstad says: “The most profitable HMOs are located in cities in or towards the north of England where property prices are significantly lower than the likes of London and the south. “And while London landlords benefit from a much higher monthly rental income, it’s still not enough to offset the large upfront investment to an extent that will bring yields on par with those available in the likes of Bradford or Liverpool. “However, all is not lost for the capital’s landlords because a new shared living sector has emerged over recent years which promises to bolster yields in the capital and beyond. “Co-living is distinct from HMOs in a number of ways, not least the way in which they are conceived, designed, and managed. “Co-living is, much like the build-to-rent sector, marketed towards well-employed young professionals who are willing to pay a rental premium in order to live in a top quality property with like minded housemates, onsite amenities and flexible tenancies that suit the world of nomadic lifestyles and remote working. “For London’s landlords, this presents a massive opportunity. “If you can provide a high-spec property with strong on-site services and amenities, you are able to charge significantly higher rents than those typically associated with HMOs.” Recent research by Excellion shows higher potential yields investors can make by converting a property into an HMO in different regions. The post Large HMOs offer highest yields and Bradford top city appeared first on Mortgage Strategy.

The Mortgage Works has reduced its stress rate by 0.50% on new buy-to-let (BTL) applications up to 65% loan to value for selected mortgages. These include five-year fixed rate terms, or like for like remortgage (all fixed product terms). The new stress rate will be 4.00% or pay rate whichever is higher. The Mortgage Works director of landlord Damian Thompson says: “These positive changes to our stress rates will serve to boost affordability. They will enable landlords to borrow more with us but, at the same, will ensure that we continue to lend responsibly.” This comes after other lenders including Nationwide, Barclays, Investec and Hodge made adjustments to their stress rate. In May, Barclays eased its stress testing to allow customers to borrow £30,000 extra to buy a home while Nationwide adjusted its mortgage affordability calculation by reducing its stress rates by between 0.75 and 1.25 percentage points. Meanwhile, Investec reduced its residential stress rates by up to 2.10% and Hodge eased affordability stress rate calculations to allow it to grant loans that are almost 20% larger for average customers. The post The Mortgage Works relaxes affordability stress rate appeared first on Mortgage Strategy.

Catalyst Property Finance has appointed Becky Harris to the dual-faceted role of chief financial officer and chief operating officer. Prior to joining Catalyst, Harris worked at MSP Capital for over eight years. She started her MSP career as finance manager and progressed through to become finance and operations director. Catalyst chief executive officer Chris Fairfax says: “We are thrilled to welcome Becky to Catalyst in this pivotal new role. Her exceptional blend of financial acumen and operational expertise will be critical as we navigate our next phase of expansion.” “This appointment reflects our dedication to building a resilient and scalable business, and Becky’s leadership will undoubtedly enhance our capabilities across the board.” Harris adds: “I am incredibly excited to join Catalyst Property Finance at such a dynamic time. There are great synergies and opportunities for us to grow the business, and I look forward to contributing to its continued success.” “I am eager to work with the talented team to achieve our strategic goals and further solidify Catalyst’s position in the market.” In April, Brilliant Solutions added Catalyst Property Finance to its lender panel. The post Catalyst appoints Harris as CFO and COO appeared first on Mortgage Strategy.

The Financial Conduct Authority (FCA) says it has stepped up its’ fight against finfluencers and other financial crimes, but concedes that resources and court backlogs are acting as a brake on quicker progress. Asked by Labour MP and Treasury Committee member John Grady MP how the FCA was dealing specifically with finfluencers and whether it would increase prosecutions, FCA chief executive Nikhil Rathi said the regulator took its role to protect consumers in the mid-low income brackets very seriously as they were most vulnerable to unscrupulous unregulated online ‘advice’ services. Rathi said finfluencers were a significant and increasing phenomenon across social media with FCA data showing around 36% of adults accessed social media for their financial information and advice. “We have been very proactive with the big tech firms to make sure that they only allow paid for financial promotions from firms that are registered with us. Finfluencers often operate cross border so while we have made a number of charges some won’t get to trial until 2027 due to the backlog in the courts. He added: “We continue to undertake arrests, these gangs tend to operate cross border which is why we have collaborated with our colleagues in a number of other jurisdictions. We have massively scaled up our work to take down problematic financial promotions, last year 20,000 were asked to be taken down or withdrawn compared to  570 a few years ago.” Going forward, Rathi said that in terms of numbers of prosecutions, FCA was incredibly active in both prevention and enforcement and in time we would see whether that was reflected in numbers going up or not. “To get successful prosecutions will take time as these things have to go to trial and we have to wait and see what judges say. And we have to look at our overall financial crime work and this (finfluencers) is just one aspect of it. We have to make choices across the breadth of financial crime of how we deploy resources. Big tech On the subject of FCA  working with the big tech firms, Lib Dem MP Bobby Dean asked whether the big tech firms tended to be reactive rather than proactive. Had the FCA been in discussion with big tech about doing more? Rathi said that was happening but that the FCA had to operate within its powers and could not force the big tech firms to take down promotions that the regulator regarded as problematic. In some instances the tech firms were co-operative and proactive but not in all cases. “It is not just the speed at which promotional material can be taken down but also how quickly new accounts can be created with almost identical content.” He explained that as things stand it is the FCA (not the platforms) deploying resources to search for these repeat promotions. Rathi agreed that an ongoing argument was who should pay or share the bill for any compensation for rogue financial promotions that hurt consumers’ pockets. Committee member and Labour MP Dame Siobhain McDonagh suggested finfluencers were able to mislead consumers partly due to a lack of financial understanding. She asked whether improved education was an important factor and whether building societies and mutuals could play a bigger role in terms of advice on product awareness and risk. “There will absolutely be a greater role for building societies and mutuals in providing more information and we think there is quite a lot people can do already, it is a question of risk to clarify when simplified advice can be provided and also put in a regime for targeted support so you can give advice to cohorts of consumers rather than just relying on personalised advice; and also digitalises advice services making that much more feasible,” Rathi said. In terms of financial education in society, Rathi conceded that compared to some other countries, the UK clearly had some work to do to improve. The post FCA defends finfluencer prosecutions record appeared first on Mortgage Strategy.

Afford.Mortgage has launched an open banking tool for mortgage brokers. The new platform has been designed to streamline client assessments, reduce application rejections and enhance adviser efficiency. Brokers will have access to instant affordability snapshots, a mortgage readiness assessment, tailored advice and AI document verification. It will also be able to use the mortgage readiness assessment. Afford.Mortgage product manager Andy Thomson says: “In developing our in-house software, we assessed over 5,000 applicants to determine affordability, verify income, and evaluate mortgage eligibility.” “Recognising its potential, we’re now offering this capability to mortgage brokers. Afford.Mortgage shows a clear picture of your client’s finances, making it easier to have honest, fact-based chats without getting drowned down in admin.” “While mortgage advice is indeed an art, integrating the right science can enhance the advisory process, allowing brokers to focus more on client relationships and less on paperwork.” The post Exclusive: Afford.Mortgage launches open banking tool for brokers appeared first on Mortgage Strategy.

Vernon Building Society has joined the lending panel of Connect Mortgages’ broker network. Its intermediary members will now have access to the mutual’s range of mortgage products, including residential lending, self-build and later life, as well as buy to let and holiday let options. The building society has a focus on underserved markets and underwriting complex cases, to help widen homeownership. Vernon Building Society head of mortgage and savings distribution Brendan Crowshaw says: “We have real people individually assessing and underwriting each mortgage so we can say ‘yes’ to borrowers who would otherwise find themselves excluded from mainstream lending. “It means we receive a number of ‘off-panel’ applications, which happened recently with Connect, so we contacted the firm about working together. Crowshaw adds that the network’s “mortgage specialisms complement what we’re able to provide, and it makes sense”. The post Vernon BS joins Connect Mortgages lending panel appeared first on Mortgage Strategy.