Year: 2025

The Supreme Court has ruled against One Savings Bank in a case concerning a borrower who said she was subject to “undue influence” by her ex-partner when they took out a remortgage. The court decided that the lender should have followed a specific legal protocol to help ensure that the homeowner, Catherine Waller-Edwards, had not been put under “undue influence” when agreeing to the loan against the property. Legal experts say the ruling means that lenders, and potentially also brokers, will need to take extra steps to satisfy themselves that borrowers are not subject this type of pressure when entering into mortgage contracts. Previous court cases have already resulted in an agreed process that lenders must follow, known as the Etridge Protocol, to help protect borrowers. However, today’s ruling, Waller-Edwards (Appellant) v One Savings Bank Plc (Respondent), means lenders will need to follow this protocol in a wider range of circumstances. The background In this case, the borrower and appellant Catherine Waller-Edwards had previously been financially independent as she owned her £600,000 home mortgage-free, had substantial savings of £150,000 and a modest pension income. But, according to the judgment, in 2011, at a time when she was “emotionally vulnerable” she entered into a relationship with builder and property developer Nicholas Bishop. Bishop persuaded her to exchange her home and savings for a property he was building, which already had a loan charged against it. In 2013, the couple remortgaged the property for £384,000 with One Savings Bank. The lender understood the remortgage would be used to pay off the existing mortgage debt and purchase another property as a buy-to-let. In fact, the money was used to pay off his car finance, credit card and to make a divorce payment to his ex-wife as well as clearing the first mortgage on the property. Following this the relationship between Waller-Edwards and Bishop broke down with Bishop moving out and Waller-Edwards remaining at the property, which was now heavily mortgaged. On her pension income alone she was unable to keep up the repayments and the mortgage went into arrears. The lender began possession proceedings in November 2021. When appealing the repossession, Waller-Edwards argued that the Etridge protocol should have applied and that she was put under undue influence by Bishop when entering into the remortgage because it was partly used to pay off Bishop’s debt of £39,500. The judge agreed, but later the County Court, High Court and Court of Appeal found that One Savings Bank was not required to follow the protocol and carry out checks to ensure that Waller-Edwards was not put under undue influence because it was considered “joint borrowing” rather than a “surety transaction” where she was acting as a kind of guarantor. Today’s judgment reverses that finding. The implications for lenders Herbert Smith Freehills Kramer senior associate Frances Edwards says: “The ‘Etridge protocol’, which has been in place since the early 2000s, seeks to protect vulnerable parties who might be forced to provide security for a loan under undue influence from the other party to the loan. “It requires banks to communicate directly with the party to ask them to obtain independent legal advice about the loan and to obtain confirmation from a solicitor acting for that party that the solicitor has fully explained the nature of the transaction and its practical implications. “In a judgment handed down on 4 June 2025, the UK Supreme Court widened the requirement on banks to follow the protocol where sums are being advanced to two non-commercial parties jointly but the funds are to be used partly for one party’s own purposes. “Practically, this requires banks to send out their usual Etridge protocol letter in these additional circumstances, which many may well have been doing following the Court of Appeal’s judgment in the case. “The judgment provides clarity as to what is required, simplifying the complex ‘fact and degree’ test suggested by the Court of Appeal.” Questions over impact on brokers Blackfords financial crime partner Jennifer Richardson says the ruling significantly increases the liability on lenders to undertake checks in respect of borrowers. But she says: “The decision also raises a lot of questions about how this will be applied in the case of mortgage brokers for example. “Will this liability extend to them as well? Should this lead to a more stringent regulatory regime? “Solicitors are often expected to identify similar situations when dealing with clients, and face regulatory investigations if they fail to do so. “It may be that we see a similar tightening of regulation amongst lenders as a result of this case.” The post Court rules against OSB over ‘undue influence’ in joint mortgage appeared first on Mortgage Strategy.

The Financial Ombudsman Service has opened a consultation on lowering the payouts it directs firms to hand over to consumers.     The study will look at cutting the interest rate applied to compensation handed down against firms who have lost cases to customers.  A typical form of interest FoS uses directs firms to pay to compensate consumers who have been ‘deprived’ of money – that is, not having it available to use – such as where an insurance claim has been wrongly turned down. In these cases, the ombudsman can currently direct the business to pay 8% interest on top of the compensation for the period their customer was out of pocket.   It can also tell a business to pay 8% interest if it doesn’t pay compensation on time.     However, following an earlier Call for Input carried out with the Financial Conduct Authority, FoS now proposes changes to its interest charges.  FoS now recommends charging an interest rate that tracks the Bank of England’s base rate plus-1%.  It says: “The base rate would be calculated as an average rate over the period that the money was due until the date redress payment is made.”  The body’s consultation document also details “a number of other interest rate options and proposals” that are open for comments until 2 July. Financial Ombudsman Service interim chief ombudsman James Dipple-Johnstone says: “We think that reform of the dispute resolution system is crucial to make it fit for the future.   That is why we are acting on feedback from our Call for Input and reviewing a range of our processes to ensure that they work for a modern economy.   “We welcome feedback from stakeholders on whether our proposed new interest rate strikes the right balance between simplicity, fairness and proportionality.”  Economic Secretary to the Treasury Emma Reynolds is currently carrying out a review of FOS to see if it remains “a simple, impartial dispute resolution service”.  Her study will include looking at the body’s compensation structure and whether it acts “as a quasi-regulator”.  In February, the Financial Ombudsman Service chief executive and chief ombudsman Abby Thomas stepped down unexpectedly without notice after joining the body in October 2022.   The post FoS to consult on lowering consumer payouts   appeared first on Mortgage Strategy.

Changes in the way lenders stress test borrowers could increase first-time buyer transactions by up to 24% over the next five years, Savills reveals. Following a change in Bank of England guidance in March, lenders are no longer required to stress test borrowers at the standard variable rate plus 1%. Lenders such as Nationwide and Barclays, among others, have already modified the way they apply the affordability test. Savills says relaxed lending rules are expected to increase the number of buyers, which in turn is expected to drive up house prices.  The amount depends on how much new housing stock is delivered to meet the additional demand.  Based on the historical relationship between loan-to-value ratios and activity levels, stress tests could increase first-time buyer transactions by 47,000 in a higher house price growth scenario, to 80,000 on a lower price growth scenario, which represents an increase of 14% and 24% respectively.  This could cause house prices to rise by an additional 5.0% to 7.5% on top of existing five-year forecasts.  Savills head of residential research Lucian Cook says: “Relaxed lending rules will certainly change the course of travel for the housing market in the medium to long term, but there will be a strong interplay between the extent to which house prices and first-time buyer transactions increase.” “The more increased borrowing capacity impacts prices, the less impact there will be on transactions.” “Change would not be immediate, with the impact on house prices and transactions likely to take place over a period of five years. The current uncertain economic outlook is likely to hold back buyer confidence and willingness to take on substantially more debt in the short term.”  “But in the medium to long term, the market would feel the knock-on impact of a widening pool of buyers. This will be good news for housing delivery but it’s unlikely to be enough to allow the government to hit its housebuilding targets.”  The post Relaxed stress tests may boost FTB sales, lift house prices: Savills appeared first on Mortgage Strategy.

Nationwide will reduce rates by up to 0.12% across selected two-, three- and five-year fixed rate products, with rates starting from 3.90%. Effective tomorrow, reductions have also been made for remortgage customers. Rates for existing customers switching, which are not changing, already start from 3.84%. New customers moving home will see reductions of up to 0.10% across two, three and five-year fixed rate products up to 90% loan-to-value (LTV). A two-year fixed rate at 60% LTV with a £1,499 fee has been lowered by 0.09% to 3.90%, while a two-year fixed rate at 75% LTV with a fee of £999 has been cut by 0.05% to 4.04%. The bank’s five-year fixed rate at 85% LTV with a £999 fee has been reduced by 0.05% to 4.29%. Existing customers moving home will see reductions of up to 0.10% across two, three and five-year fixed rate products up to 90% LTV/ A two-year fixed rate at 60% LTV with a fee of £1,499 has been cut by 0.09% to 3.90% and the two-year fixed rate at 75% LTV with a £999 fee has been trimmed by 0.05% to 4.04%. The five-year fixed rate at 85% LTV with a fee of £999 has been lowered by 0.05% to 4.29%. Nationwide has also made reductions of up to 0.12% for remortgage products across two, three and five-year fixed rate products up to 85% LTV with rates starting from 3.92%. These include a two-year fixed rate at 60% LTV with a £1,499 fee, which has been cut by 0.12% to 3.92%. The three-year fixed rate at 75% LTV with no fee has been cut by 0.07% to 4.47% and the five-year fixed rate at 85% LTV with no fee has been trimmed by 0.09% to 4.52%. Nationwide senior manager of mortgages Carlo Pileggi says: : “These latest reductions will be welcome news for borrowers. We remain as committed as ever to supporting all areas of the market, whether it’s first-time buyers, home movers or those looking for a new deal, and with our reduced rates starting from 3.90%, we aim to be front of mind.” Commenting on the cuts, Trinity Financial head of communications and PR Aaron Strutt says: “Good to see Nationwide lowering rates again after putting them up a few weeks ago especially as most lenders have been pushing up the cost of their mortgages.” “It looks like the lender is lowering its two year fix from 3.99% to 3.90% – £1,499 fee and 40% deposit.” “The two-year remortgage rate is also coming down from 4.04% to 3.92%. £1,499 fee and 40% deposit.” Last month, Nationwide adjusted its mortgage affordability calculation by reducing its stress rates by between 0.75 and 1.25 percentage points. The post Nationwide trims prices by up to 12bps, rates start from 3.90% appeared first on Mortgage Strategy.

The spending review will ‘make or break’ Labour’s chances of building 1.5 million new homes over the next five years, says the Commons housing committee chair.   Housing, Communities and Local Government committee chair Florence Eshalomi (pictured) wrote to the Chancellor to “underscore the importance of investment in social and affordable housing.” Eshalomi warned Rachel Reeves that “the government will fail to meet this target if it relies on the private sector alone,” to hit its target of building some 300,000 homes a year.  The letter from the housing committee chair comes as reports say that housing secretary Angela Rayner, home secretary Yvette Cooper and energy secretary Ed Miliband, are the three remaining ministers holding out for more cash ahead of the government’s multi-year settlement to be announced next Wednesday.  Reeves wants to spend as much as £113bn throughout this parliament across such areas as defence, infrastructure, housing and transport, while capping day-to-day departmental costs.  But Eshalomi said: “Despite the cross-party consensus of the need to increase housebuilding, successive governments have for decades failed to deliver enough new homes.   “This has resulted in and a housing affordability crisis, with families waiting years on social housing waiting lists and the dream of home ownership fading for many.”  She highlighted that Shelter, Crisis, and the National Housing Federation say the government should set a target to deliver 90,000 social rent homes per year to begin to tackle the growing waiting list for social housing in England.  Eshalomi wrote that 1977 was the last time the UK built over 300,000 homes in a single year.  “That year, more homes were built by local authorities than private enterprise,” Eshalomi added. The post Spending review will ‘make or break’ 1.5 million homes pledge: MPs   appeared first on Mortgage Strategy.

The Monetary Policy Committee denied there was any ‘group think’ or a ‘cluster pattern’ in how the members voted on interest rates. Asked by Select Committee member and Liberal Democrat MP Bobby Dean why specific members seemed to consistently vote the same way – Catherine Mann and Huw Pill; and Andrew Bailey and Sarah Breedon – the BoE governor Andrew Bailey played down claims of a serious ‘divide in the committee’. Mann agreed and added that each member took their role very seriously but sometimes interpreted and weighted data differently. “Different people weigh the variables in different ways.” Last month, the Bank’s rate-setting Monetary Policy Committee voted in a 5-2-2 split to cut rates, with Dr Swati Dhingra and Alan Taylor pressing for a larger 0.5% reduction, while Catherine L Mann and Huw Pill were happy with the status quo. Five members Bailey, Breeden, Megan Greene, Clare Lombardelli and Dave Ramsden voted for the 0.25% cut. Dr Dhingra explained to the committee her reasons for being more aggressive in calling for 0.5% cut in June. She said that consumption and investment had been weak and the global situation had resulted in forecasts being revised downwards because the trade policy atmosphere looked very strained. “Alongside these two factors and the general view that we don’t need to weigh down on living standards as much as we have had to, to get price stability back on target – that was the reason I moved towards a larger reduction in bank rate this time.” Mann then explained to the committee her decision to advocate for a rate hold. She said that in February she had voted for a 50bps but from February to May the labour market had not loosened as much as she had expected and consumption was no weaker than she had thought. More importantly, Mann stressed that inflation, though decelerating, was not decelerating consistent with achieving the 2% target in the medium term.  The fact that financial markets had eased quite dramatically was also a contributory factor behind her ‘hold’ vote. Bailey, Dhingra, Breedon and Mann all agreed that the ‘glide path’ on inflation was downward but as Mann stressed, the volatile environment meant there were concerns regarding inflation pressures and this meant timeframes on hitting inflation targets remained uncertain. The post MPC members explains May split decision appeared first on Mortgage Strategy.

UK Finance has called for a comprehensive strategy to increase demand for green home improvements. In its latest report, UK Finance says there is a need for a blend of targeted policy measures, public information campaigns, and advisory services to encourage homeowners, landlords, and housing associations to retrofit their properties. The report draws on YouGov research to show the attitudes of UK consumers specifically towards heat pump technology. The UK needs to install around 1.5m heat pumps per year by 2035 to meet its carbon reduction goals, however, data shows consumer adoption rates are very short of these targets. Research revealed that 54% said the main barrier to discouraging them from getting a head pump was the high up-front cost, while 44% said they would switch if they were provided with a clear idea of the savings in running costs. The report sets out nine recommendations that UK Finance suggests should be included in the government’s upcoming Warm Homes Plan. These include establishing a government-led body or group to drive collaboration across key stakeholders, provide certainty for firms involved in retrofitting and launch a public awareness campaign with independent guidance to counter misinformation. In addition, it has asked for the government to provide grants, subsidies, and a coordinated plan to train sufficient tradespeople and rebalance electricity and gas prices through adjustments to levies/ targeted support. UK Finance urges the government to deploy funding to enable lower-cost green home lending, maintain and expand grant programmes to support green home improvements, set clear long-term expectations so households and firms can prepare and update energy efficiency metrics for accurate property performance and consistency. UK Finance director of sustainability policy Ian Bhullar says: “To meet our ambitious targets on greening the UK’s housing stock we need to drive demand and convince the public of the benefits.” “Lenders are committed to playing their part and through the government’s Warm Homes Plan we have the opportunity to really make a difference. Increasing demand for green home improvements will bring significant benefits, stimulate job creation, drive innovation, and reinforce the UK’s energy security in an increasingly volatile global market.” Yesterday, UK Finance revealed there was a sharp increase in mortgage completions in the first quarter of 2025. The post UK Finance calls for action to increase demand for green home upgrades appeared first on Mortgage Strategy.

Foundation Home Loans has launched buy-to-let (BTL) special products for short term lets. The new products include a F1 Special Portfolio Landlord Only five-year fixed rate at 4.39% with an 8% fee. This comes with a loan size of £2m up to 65% loan-to-value (LTV). In addition, the lender has added a F2 Short Term Let Special two-year fixed rate at 6.09% at 75% LTV with a fee of £1,995 and a five-year equivalent at 5.74% at 75% LTV with a 4% fee. Elsewhere, Santander has launched a buy-to-let (BTL) remortgage range and will lower rates by 0.15% on all 60%, 65% and 75% LTV fixes. The lender has also announced that it will withdraw 70% LTV BTL remortgage fixed rates. Due to market conditions, Santander says it has increased lower LTV fixed rates for FTB, home mover, new build and remortgage by up to 0.13%. For product transfers, most BTL 60% to 75% LTV fixed rates have been reduced by up to 0.10%. Meanwhile, Plus residential seven-year fixed rates have increased by up to 0.06%. Earlier today, Clydesdale Bank announced it is hiking rates on a number of products by up to 25 basis points. The post Foundation launches BTL specials, Santander adds BTL remortgage range appeared first on Mortgage Strategy.

Illustration by Dan Murrell My alarm goes off at… …5.50am. I love to get up before everyone else, when the house is quiet and before the hustle and bustle of the morning kicks in. I wanted to work in the finance industry because… …I’ve always really enjoyed the fast pace, which I think stems from my first role in financial services, during the financial crisis (talk about a baptism of fire!). It was then that I got the bug for the adrenaline that comes from needing to think fast and smart to keep pace with change. Marketing should sit at the heart of a strategy, alongside the other functions Within financial services, though, my heart is in mortgages and this has been reaffirmed having spent three years away. Our industry has to be one of the most supportive, friendly and fun there is, alongside a huge desire to be progressive and inclusive…. It’s fab. Lastly, how lucky are we that the service we provide genuinely changes consumers’ lives? Whether it’s helping them to buy their first home or move to grow their family, or just saving them money on a monthly basis with a better deal, it’s humbling to know we have the power to make a difference. Something that has surprised me about my job is… …the culture at L&C is unreal! We have this value of ‘One L&C’, which is about the whole business, no matter the role, being united and working together. It runs through the DNA. It’s critical we get the balance right between volume and adviser capacity to ensure all of the customers getting in touch are answered I can honestly say I’ve never worked anywhere where the drive to make our business better is so evident and the team so aligned on making that happen. A misconception about my role is… …that marketing is just about ‘making things look good or sound nice’ (fellow marketers will share the heart-sinking feeling we get when we’ve been asked to make a Powerpoint presentation ‘pretty’). It’s humbling to know we have the power to make a difference Historically, marketing has been seen as one of the softer, supporting roles, which is brought in to execute initiatives or programmes of work. One of the big pull factors for me at L&C was the recognition that marketing should sit at the heart of a strategy, alongside the other functions. My typical working day entails… …the day always starts with a review of our performance from the previous day and how we’re managing our lead volumes through the business. L&C generates a significant volume of enquiries every day, so it’s critical we get the balance right between volume and adviser capacity to ensure all of the customers getting in touch are answered. Historically, marketing has been seen as one of the softer, supporting roles One of my favourite things about my role is that there isn’t, in fact, a typical day. My remit spans marketing, partnerships and PR, which means that a typical day could include anything from reviewing our PR plans for the upcoming quarter and meeting with our digital agencies to get the latest insight and future trends, to reviewing new campaigns and meeting with our partners. My favourite work memory is… …so far at L&C my favourite work memory is the Winter Parties that were held in Newcastle and Bath in January. We have this value of ‘One L&C’, which is about the whole business, no matter the role, being united and working together It was my first week in the business and to get the chance to meet so many of our colleagues and get a feel for the culture was fantastic. To unwind after work, I… …adopt a healthy balance of running and drinking wine (but never at the same time). This article featured in the May 2025 edition of Mortgage Strategy. If you would like to subscribe to the monthly print or digital magazine, please click here. The post Day in the Life of… Gemma Bacon, head of marketing at L&C Mortgages appeared first on Mortgage Strategy.

The size of the average home has been increasing over the past three decades, with usable floor space rising from 91.39 m² in the 1990s to 96.48 m² in the 2020s, new analysis shows. The increases could reflect home owners adding home offices, loft conversions and extensions to maximise their property’s footprint as house prices have soared. Average property prices have jumped by 349% over the same timeframe from £55,778 in the 1990s to £250,346 in the 2020s, according to broadband and digital services company SmartMove, which carried out the research. This boom in prices followed a sharp increase of 249% over the 1980s alone, when the Thatcher’s government’s Right to Buy scheme put many more people on the housing ladder. Income growth has been steady but slower than house prices. Average weekly income grew from £289 in the 1990s to £772 in the 2020s, while household savings rates fluctuated, dropping during the 2000s and 2010s but rising again this decade. SmartMove moving expert Jes Johnson says: “Housing affordability in the UK is a multifaceted challenge that requires both careful market analysis and proactive policymaking. “The steep rise in house prices during the 1970s and 1980s can be attributed to inflationary pressures and housing policies like Right to Buy, which, while empowering many to own homes, simultaneously tightened supply and increased demand. “Though incomes have risen steadily, they have not kept pace with housing costs, making affordability an issue for many, especially first-time buyers. “The trend of increasing home sizes since the 1990s indicates evolving consumer preferences for more spacious, versatile living spaces, a shift accelerated by remote work demands. “However, land scarcity and planning regulations have tempered this growth somewhat in recent years.” The news comes as UK Finance calls for more action to boost homes’ energy efficiency through green upgrades. The post Average home bigger than 1990s despite cost pressure appeared first on Mortgage Strategy.