The Intermediary – December 2024 by theintermediary

“I knew I wouldn’t regret getting the self-driving model”

From the editor...

To spout an incredibly over-used sentiment that we will all have heard in meetings, ge ing coﬀee, down the pub, and more, this year has passed shockingly fast.

It was while editing this month’s feature – a comprehensive look back at the trials, tribulations and turbulence of 2024 – that I was truly reminded of how quickly the months can slip away.

January saw our lives here at The Intermediary absolutely consumed with the rate war, doing our level best to keep up – just as brokers did the same – with rapid-ﬁre market changes.

Then, our next big internal trend was my joy at being able to spit poison at the Tories following what was, from this industry’s perspective, an absolute ﬂop of a Spring Budget. This glee quickly grew as General Election prep meant watching a soggy Sunak phone it in, much to the delight of my li le le y heart.

Then, a er ge ing precisely the present I asked for come the big day – namely booting the old guard out – came plummeting buyer’s remorse. Along with the post-election party hangover was the rapidly advancing reminder to be careful what you wish for.

At least if the party in power isn’t to your particular political leaning, you get to be vitriolic when they let you down. And once again, this point was proven when the Autumn Budget was something of a let-down, indeed.

There were some blessings to be counted in the form of certain more dreaded changes not

taking shape, but it wasn’t quite the stocking full of joy many in the housing market were hoping for. I for one am not looking forward to a repetition of the ‘bo le-neck followed by cliﬀedge’ motif we saw triggered by the Covid-19 Stamp Duty Holiday when that April 2025 deadline comes around.

There is, of course, more to life than just politics – though at some points this year it hasn’t felt like it. Here at The Intermediary, we’ve hit some incredible milestones that even this Grinch can’t help but feel festive about.

At a time when publishing, and print in particular, has faced its fair share of challenges, this magazine has thrived, thanks in no small part to the hard work of all our industry commentators, as well as the team itself.

Speaking of the team, we’ve bucked yet another trend by doubling our editorial headcount, ready for another period of growth and success in 2024.

Finally, of course, we burst onto the events scene with the National Mortgage Awards –Second Charge, which was highly successful.

Of course, I would say that, so best to ﬂick through the mag if you want to hear from some of our sponsors and winners, and spot some cracking photos from the night.

So, ending on a slightly more positive note, despite all the ups and downs of the year, all that remains for me to say is: Merry Christmas! ●

Jessica Bird

@jess_jbird

www.theintermediary.co.uk www.uk.linkedin.com/company/the-intermediary @IntermediaryUK www.facebook.com/IntermediaryUK

The Team

Jessica Bird Managing Editor

Jessica O’Connor Senior Reporter

Marvin Onumonu Reporter

Zarah Choudhary Reporter editorial@theintermediary.co.uk

Stephen Watson BDM stephen@theintermediary.co.uk

Ryan Fowler Publisher

Felix Blakeston Associate Publisher

Helen Thorne Accounts nance@theintermediary.co.uk

Barbara Prada Designer

Bryan Hay Associate Editor Subscriptions subscriptions@theintermediary.co.uk

Contributors

Ahmed Bawa | Alex Upton | Andre Parcian Averil Leimon | Charles Roe

Christopher Tanner | Claire Askham

Dale Jannels | David Wylie | Emma Green

Geo Hall | I hikar Mohamed James Gillam | Jerry Mulle

Jimmy Allen | John Tilzey | Jonathan Fowler

Jonathan Westho | Laura omas

Leon Diamond | Matthew Cumber

Nick Hale | Prateek Solapurker

Praven Subbramoney | Richard Avery Wright

Rob Cli ord | Rob Stanton | Robin Johnson

Ross Turell | Ryan Brailsford

Simon Hayton | Steph Dunkley

Stephanie Charman | Steve Carruthers

Steve Goodall | Tanya Elmaz

Tim Parkes | Tom Denman-Molloy

Wayne Douglas | Yann Murciano

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Feature 36

2024: A YEAR IN REVIEW

Jessica O’Connor looks at the successes, setbacks and the road ahead

Broker business 60

A look at the practical realities of being a broker, from mentoring to the monthly case clinic

Local focus 68

This month The Intermediary returns to the North Pole for a festive look at property trends

On the move 70

An eye on the revolving doors of the mortgage market: the latest industry job moves

INTERVIEWS & PROFILES

The Interview 18

TOGETHER

Tanya Elmaz discusses specialist residential trends and the outlook for 2025

Pro le 14

WEST BROM BUILDING SOCIETY

Jonathan Westhoﬀ looks back as the society celebrates 175 years

Pro le 52

PURE RETIREMENT

Simon Hayton considers an eventful year in equity release

Q&A 30

RAW CAPITAL PARTNERS

Richard Avery Wright and Tim Parkes celebrate nine years and major growth milestones

Q&A 44

PURE PANEL MANAGEMENT

James Gillam discusses his expectations for the business in 2025

REDWOOD

Andre Parcian on the challenges and opportunities facing business development managers

Breaking down barriers for firsttime buyers

It’s often said that first-time buyers are the engine room of the property market, helping to drive liquidity and stimulate activity. So, encouraging more hopeful homeowners into the market benefits everyone in our industry – not to mention helping those individual customers into their own homes.

This is why we should pay close attention to research from the latest Pepper Money Specialist Lending Study, which shows that potential first-time buyers continue to have significant misconceptions about the size of the deposit they need in order to own their first home.

According to the study, nearly seven in 10 (69%) people who don’t currently own their own home say they would like to in the future. However, 22% think it will take more than five years for them to be in a financial position where they can own their own home, and 36% think they will never be able to do so.

Step on the ladder

For these potential first-time buyers, the most significant barrier to homeownership – cited by 32% – is saving a big enough deposit. However, when it comes to the size of deposit they’ll actually need, there’s a real lack of understanding. Nearly a third (32%) say that they don’t know what size of deposit they’ll need, and the same number again (32%) think they’ll need to save a deposit of at least 20% or more.

Within the industry, we all know that there are plenty of high loanto-value (LTV) options and

homeownership schemes that could help first-time buyers get a foot up onto the property ladder. However, misconceptions are discouraging many from even exploring their options.

Brokers have an opportunity to dispel these myths for potential buyers with lower deposits.

By educating customers about the possibilities, brokers can empower more people to enter the market, and in doing so, create a new wave of first-time buyers, opening doors to homeownership for those who might otherwise put it off indefinitely.

Lack of awareness

In addition to misunderstandings around deposits, many potential buyers remain unaware of affordable homeownership schemes that have come to the fore, since the end of Help to Buy, as ways that could help first-time buyers to achieve their goals sooner.

Schemes like Shared Ownership, Right to Buy, and First Homes are specifically designed to make

RYAN BRAILSFORD is director of business development at Pepper Money

homeownership more attainable, yet they remain relatively unknown. Where there is awareness of the scheme, there’s often still misunderstandings about eligibility criteria.

For example, to qualify for Right to Buy, someone needs to have lived in local authority housing for at least three years. However, 71% of people don’t know this, and 16% think they will need to live in local authority housing for at least five years before qualifying.

For brokers, this presents an opportunity to reach new customers by proactively promoting these affordable homeownership options.

By helping customers to better understand the range of schemes available, brokers can increase their confidence and readiness to take their first steps toward purchasing a home.

The demand for homeownership is robust, but misconceptions about deposit sizes and financing options create unnecessary obstacles.

Brokers who take the time to address these misconceptions can unlock a new pool of potential customers who are eager but hesitant.

Helping customers understand that smaller deposits and affordable ownership schemes are well within reach is a winwin. It empowers hopeful homeowners to act on their aspirations, and it offers brokers the chance to grow their business by broadening their customer base. ●

Navigating the postBudget landscape

The recent Budget brings a mix of optimism and caution for the mortgage sector, introducing measures with the potential to drive innovation, improve processes, and broaden homeownership. However, the true impact will depend on the interplay of policy implementation, regulatory alignment, and industry adaptability. Let’s unpack some of the key elements and their implications for the mortgage market.

One of the Budget’s standout initiatives is the AI Opportunities Plan, which seeks to identify sectors where artificial intelligence (AI) can support economic growth. If financial services becomes a focal point, the mortgage industry could witness significant transformation.

From predictive analytics in credit assessment to automating complex administrative tasks, AI holds immense potential to enhance efficiency and customer experience.

Going for growth

However, this potential hinges on the approach of regulatory bodies like the Financial Conduct Authority (FCA).

A forward-thinking, supportive regulatory environment could spur innovation and growth. Conversely, rigid compliance frameworks might burden brokers and lenders, dampening enthusiasm for AI integration. Collaboration between policymakers, regulators, and industry stakeholders will be pivotal to unlocking the full benefits of AI in the mortgage industry.

The Budget also underscores the success of the Open Property Data Association (OPDA), which is in its first year, showing a promising signal for technology-driven improvements in property transactions.

By enhancing transparency and reducing administrative friction,

e path forward for the housing market is uncertain

organisations like the OPDA could revolutionise how brokers and borrowers interact with property data.

Continued investment in such initiatives is essential. If the OPDA’s capabilities expand, enabling seamless integration with mortgage applications and lending platforms, the industry could achieve unprecedented efficiency. Brokers would spend less time on paperwork, and borrowers could enjoy quicker, more accurate decision-making.

Changes to Stamp Duty thresholds bring both opportunities and challenges. For first-time buyers, the temporary exemption threshold of £425,000 provides immediate relief. Yet, its rollback to £300,000 in 2025 casts uncertainty over longterm affordability. The short-term nature of this measure may fail to stimulate sustained growth in this market segment.

Additionally, increasing Stamp Duty on second homes from 3% to 5% could cool the buy-to-let (BTL) market. While this might ease competition for first-time buyers, it also raises acquisition costs for property investors, potentially dampening rental supply – a critical

DALE JANNELS is CEO of One Mortgage System (OMS)

factor in a housing market with already limited availability.

The rebranding and revamp of the Mortgage Guarantee Scheme into the Freedom to Buy scheme marks an effort to make low-deposit mortgages more accessible. This initiative could be a game-changer for first-time buyers, reducing barriers to entry in a challenging market.

However, the scheme’s success will depend on its structure and execution. Questions remain about how lenders will be incentivised and how brokers will be supported in facilitating these mortgages. Clear guidance and robust backing from the government will be critical to ensuring that the scheme delivers on its promise.

Unclear ahead

Looking ahead, the recent Budget reflects a broader ambition to support the housing market and mortgage sector through technology, regulatory reform, and financial incentives. Yet, the path forward is uncertain.

Success will depend on the clarity and execution of policies, the adaptability of the mortgage industry, and the willingness of regulators to foster innovation without stifling compliance.

For brokers, lenders, and buyers, the message is clear: stay informed, adapt to changing dynamics, and embrace technology.

By doing so, the mortgage sector can turn the opportunities presented by this Budget into lasting progress. ●

Three themes to

This time of year is always full of articles taking a look back, and others looking forwards. There’s a reason for this – it is actually a really useful process and can bring clarity to where your business is and what plans you need to make for the coming year to maximise your chances of success.

Rather than getting out the ubiquitous crystal ball, thinking about what customers and lenders are going to be focused on is a helpful, practical thing to do. It can help you understand your own strengths, weaknesses and opportunities.

By no means is this list exhaustive, but it might prove useful to consider the coming year through the lens of these themes.

The environment

The recent spate of serious floods is a reminder that the environment is something we will have to address.

The public swell of support for cutting our carbon emissions and pushing for a greener future has waned over the past few years as the more

immediate impact of higher interest rates and rapidly rising prices became the priority for most people.

As such, lenders have had to adapt their own priorities. Chief among them now is how to support borrowers facing much tighter affordability and increased financial uncertainty in the wake of the Autumn Budget.

This does not mean that energy efficiency standards should be disregarded, far from it.

Earlier this year the Climate Change Committee published its assessment of the UK’s progress towards meeting its net zero targets. It concluded that just a third of the emissions reductions required to achieve the country’s 2030 target are currently covered by credible plans.

At the start of 2024 markets were pricing in three or more cuts to the base rate by the year end –we’ve had two”

expect in 2025

Top among its recommendations to the Government was to find ways to make electricity cheaper and reverse policy rollbacks under the Conservative Government.

It also noted that approximately 10% of existing homes in the UK will need to be heated by a heat pump, compared to 1% today. Of particular concern to the Committee were changes to buildings policy, including exempting 20% of households from the phase-out of fossil fuel boilers by 2035.

The Government is currently consulting on much of its policy for retrofitting the UK’s housing stock, which according to the House of Commons Library was responsible for a fifth of the country’s carbon emissions in 2022. Expect some clarity on its plans early next year.

Our annual Mortgage Efficiency Survey highlighted that consumers have little appetite for investing thousands of pounds in retrofitting property with the cost-of-living crisis playing a significant part in causing the dwindling interest from borrowers.

That said, a study by economics consultancy CEBR and Kingfisher, owner of B&Q and Screwfix, suggests that energy inefficient homes are costing households £3.8bn in additional annual energy bills. Their analysis suggests that older generations are the hardest hit, with 60% of over-65s living in inefficient homes. Given that this generation is more likely to own their own home, there is potential for innovation here.

Interest rates

What a difference 12 months makes. We have a new Government, a new ideological policy agenda and a new Budget. At the start of 2024 markets were pricing in three or more cuts to the base rate by the year end – we’ve had two.

Within days of Chancellor Rachel Reeves announcing a radical series of tax and spend policies, including changing public borrowing rules, the

Bank of England went ahead with its widely expected cut to interest rates from 5% to 4.75%.

Despite this move to loosen monetary policy, markets are clearly registering some trepidation. Swap rates rose in the weeks after Reeves’ Budget, with data service Moneyfacts noting that lenders had generally already factored the latest base rate cut into their fixed pricing.

The average standard variable rate (SVR) continues to stand at 7.95%, with little evidence that it will come down soon. It’s possible that lenders are building in capital headroom in the event that arrears continue to rise.

The planned 1.2% rise in employer National Insurance (NI) contributions from April next year, along with a rise in the National Living Wage has prompted warnings of ‘inevitable’ job losses by some of the UK’s biggest employers, including Tesco, Amazon, Greggs and Next.

It’s possible we will see a ripple effect across the jobs market, piling further pressure onto household finances.

Inflation

The September publication of the British Chambers of Commerce’s (BCC) Quarterly Economic Forecast painted a relatively weak picture for economic growth, with Government spending the main driver of GDP this year. Average earnings are expected to grow more slowly over the forecast period, but according to the BCC, they will continue to remain above inflation. Annual wage growth is expected to be 4% in Q4 2024, remaining at the same level in Q4 2025, before falling to 3.5% in Q4 2026.

Inflation matters for homeowners, eating into disposable income for those fortunate enough to have some, and increasing pressure on spending on non-essentials for those whose finances are already tightly budgeted.

A Nationwide study published earlier this year showed first-time buyers are spending about 37% of their take-home pay on mortgage

STEVE CARRUTHERS is business development director at MSO

repayments, far above the long-term average of 30%.

Though the annual rate of inflation might have slowed to just over 2% in October, according to the Office for National Statistics (ONS), pressure on household finances remains high.

UK Finance figures suggest that around 1.8 million fixed rate mortgage products are due to end next year, with many of those expected to be coming off comparatively very cheap 5-year fixed rates. The affordability shock will be painful for many.

Advice for these borrowers will be absolutely critical.

These three areas are not exhaustive, but if we are honest, will almost certainly dominate the market and regulatory agenda over the coming 12 months.

Consumer Duty is, of course, one more area where we may see enforcement action and a further focus on improvement in systems and processes to deliver better outcomes, but this will be addressed alongside these main themes – not to their exclusion.

These three are the great unknowns in terms of impact and probability of risk to lenders and borrowers alike. They will inform every decision we make. ●

London 2025: More than green shoots

As we approach the end of the year, there are a number of predictions being made about what the property market will look like in 2025. With Stamp Duty thresholds set to revert to their previous levels from next April, and the threat of inflation hanging over any future interest rate reductions, there is an air of uncertainty as we prepare to feel the full force of Rachel Reeves’ Budget. So, what does this mean for London?

Recent data from Rightmove shows that the average price of houses coming to the market in London increased by 1.7% in the year to October, while the average asking price in London in October was £694,906.

rise seen in October 2023 at 10.2% and affordability in the capital is still proving to be an issue, as recent data shows that Londoners starting new tenancies were spending 39% of their income on rent, down 1% from the peak of 40% in February.

Varied influences

It is worth remembering when we speak about the London property market that it is very different to other markets, making it difficult to make predictions as a whole.

London is a dynamic and unique landscape, a vibrant mix of diverse markets each with its own opportunities and influences, coming together to affect property prices and values.

ROBIN JOHNSON is managing director at KFH

Committed to the city

While there is no doubt that the Budget has injected some volatility into the UK property market, and arguably the economy at large, this is where London’s international reputation as a reliable investment will stand it in good stead.

Indeed, Chancellor Rachel Reeves reiterated her commitment to the City in her Mansion House speech with a promise to look at deregulating the industry.

Economists remain bullish about the fortunes of interest rates next

It is this diversification that has contributed to London’s remarkable resilience and enduring appeal over the past few years, and that will help to sustain it through any future challenges the housing market may face in 2025.

year”

The Office for National Statistics (ONS) price index shows that the biggest increases in house prices in the boroughs were in Newham (6.3%), Havering (5.2%) and Harrow (4.4%). The biggest falls were in Kensington and Chelsea (15.8%), Westminster (6.5%) and Camden (5.4%).

When it comes to the rental sector in London, growth in average private rents remains high, but growth in rents for new tenancies has slowed markedly. According to ONS data, the average private rent in London reached £2,145 in September 2014, up 9.8% in the last year, but was below the record high annual rise of 11.2% in March 2024.

Figures on rents for new tenancies in London saw a 0.9% increase in the year to October, which was significantly lower than the annual

The Bank of England announced in November that it would be cutting interest rates for the second time this year, to 4.75% from 5%, but any further reductions in interest rates are likely to be slower than previously predicted, as inflation is expected to creep up because of the autumn budget.

Nevertheless, many economists remain bullish about the fortunes of interest rates next year and that is undoubtedly good news for those facing affordability challenges.

The Chancellor also announced changes around Stamp Duty next year. The thresholds for the property tax are set to drop from £425,000 to £300,000 for first-time buyers and from £250,000 to £125,000 for home movers from April next year.

The Stamp Duty surcharge on second homes and investment properties was also raised from 3% to 5% the day after the Budget.

A robust housing market, significant investment and infrastructure, and the city’s reputation for world-class education, will all keep it an attractive proposition to global buyers.

London also remains a top choice for international event organisers.

The ExCel London recently hosted the World Travel Market event, which added approximately £200m to the London economy and saw more than 40,000 travel professionals from around the world descend on the capital.

The Office for Budget Responsibility (OBR) has forecast that while the policies announced in the Budget would temporarily boost GDP in the immediate term, they will leave the size of the economy largely unchanged at the end of the five-year forecast. However, in the longer term the extra public sector investment will help to raise growth.

While the Chancellor’s Budget has got alarm bells ringing in some parts, London’s reputation to weather any storm precedes it, and the draw that it continues to have globally is what will help to support other markets in the capital, and ensure that London, as it always does, stands strong. ●

Lender-broker relationships ever more important

The UK mortgage market has had a rocky year, with borrowers and homeowners facing challenges such as uncertainty around interest rates and affordability stretched by stubborn inflation and increased living costs.

Despite a recent drop in interest rates to 4.75% in November, mortgage rates have remained high, averaging around 5.25% – the highest level in 16 years.

Adding to the pressure, house prices have remained high despite economic challenges, reaching an average of £293,999 in October. This means that many potential buyers, particularly first-time buyers, continue to struggle to build the deposits needed to get on the housing ladder.

Uncertainty is likely

Looking ahead to 2025, the mortgage market shows signs of improvement but remains influenced by several unpredictable factors. Inflation is still not fully under control, and economic growth remains slow, keeping the Bank of England on alert to manage inflation at the same time as keeping interest rates at sustainable levels.

Government policy changes offer hope, with ambitious housing plans including a commitment to build 1.5 million homes over the next five years. However, the impact of these policies is unlikely to be seen immediately.

The return of lower Stamp Duty thresholds in March 2025, dropping from £250,000 to £125,000, and £425,000 to £300,000 for first-time buyers, will increase upfront costs for more homebuyers, adding to affordability pressures.

Global uncertainties and instability will also cast a shadow over 2025 and

could disrupt global markets. While these geopolitical changes will not directly affect the UK housing market, their ripple effects on economic stability could impact both lenders and borrowers.

Borrower challenges

A key issue is the growing gap between traditional mortgage products and the way people work today. More people are shifting towards self-employment, freelancing, and entrepreneurship, resulting in non-traditional incomes.

These borrowers often find the mortgage process difficult, and this will remain a concern for brokers in 2025. In fact, our research shows that 39% of individuals worry that their type of work will make it harder to secure a mortgage.

Financial lifestyles once considered unconventional are now the norm. The trend of these borrowers struggling to get a mortgage is set to continue unless action is taken.

We are addressing these challenges with flexible mortgage options designed to support borrowers – both in the UK as well as foreign nationals – and that reflect the significant and ongoing changes in the way people live their lives, earn their income, and choose to manage their money.

For example, we consider selfemployed incomes and can assess the latest year’s trading figures, subject to sustainability.

Additionally, we do not require bank statements for most cases at or below 80% loan-to-value (LTV).

Building stability

Despite all of this, there are plenty of reasons to be optimistic. What is clear, though, is that strong relationships between lenders and brokers will be more crucial than ever.

Financial lifestyles once considered unconventional are now the norm”

From speaking with our brokers, we know they play a key role in matching borrowers with the right mortgage products, especially for those with unique financial situations, such as self-employed individuals and foreign nationals.

Lenders, in turn, need to work closely with brokers to quickly adapt to market changes and offer more flexible products. We are committed to doing this, providing brokers with the tools, training, and innovative products they need to thrive.

Our collaboration with MQube leverages an AI-driven mortgage origination platform to streamline processes and enhance efficiency for brokers. We also ensure clear and consistent communication, offer resources that simplify the mortgage journey, and design products tailored to accommodate a wider range of financial circumstances.

Working together

The upcoming 12 months will demand a collaborative approach. While borrowers will face challenges, the good news is that the industry has a chance to respond with the innovation needed to ensure more people get the support they need to get onto the property ladder.

By focusing on collaboration and meeting the needs of a wider range of customers, the industry can help create a stronger and more adaptable housing market next year. ●

Lenders, don’t bite the hand that feeds you

Iview the relationship between brokers and lenders as a partnership – one characterised by respect, transparency, honesty and a mutual alignment with common goals.

But relations haven’t always been as cordial as they are now. A decade or so ago, one could argue that they were even adversarial, at times.

Lenders won’t like to admit it, but back then many of them operated aggressive ‘direct first’ strategies to cut brokers out of the equation.

For a while, it looked like they might succeed. In 2009, for example, less than half of all lending was originated by the broker channel, according to UK Finance.

However, the introduction of the Mortgage Market Review (MMR) tilted the balance back in brokers’ favour.

While the aim of the MMR was to ensure – quite rightly – that sensible lending prevailed, there’s no denying that the rules enhanced the position of brokers in the eyes of borrowers.

As the pendulum swung that way, the vast majority of lenders have come to appreciate how vital the broker channel is if they want to hit their lending targets. This feels like a much better place to be, and I can’t imagine why anyone would go back to the way things were.

Sometimes, however, it feels as though some lenders – a very small number, I might add – take the relationship for granted.

For example, withdrawing products with little or no notice. I understand that the key driver of this is swap rate volatility, and that when swaps lurch higher, lenders must protect their position. But some lenders are far better at managing this than others.

That’s a daily source of frustration for brokers, but the thing that concerns me most is the re-emergence – albeit limited – of dual pricing.

Dual approach

Dual pricing virtually disappeared during the 2010s as the broker channel became dominant. However, we have seen it creep back into the market in recent times.

Without naming names, those operating such strategies are not operating on the periphery, but are well-known mainstream companies.

To be clear, it’s a lender’s prerogative to decide its own strategy, even if that means charging different rates depending on the distribution channel.

Clearly, as head of a mortgage network, I am firmly against dual pricing – but perhaps not for the reason you may think.

Of course I think it is unfair on advisers, but I don’t believe dual pricing is a threat to brokers. The thing that bothers me most is that dual pricing punishes borrowers who seek advice for what is probably the biggest purchase they’ll ever make. That’s not right.

Whether some lenders like it or not, their success is heavily dependent on the broker market – and I can’t see that changing any time soon.

Vital brokers

I don’t wish to come across like I am having a dig at the whole lender community. The vast majority of lenders value the relationship they have with brokers and see them as a vital component of their distribution strategy.

That said, clearly there are some that are once again exploring if technology and two-tier pricing

ROB CLIFFORD is chief executive at Stonebridge

Whether some lenders like it or not, their success is heavily dependent on the broker market – and I can’t see that changing any time soon”

structures can win them more direct business.

Good luck to them. But for that approach to work, borrowers need to be aware that they can get a better deal by going direct. I’m just not sure they are. Even then, the vast majority of borrowers want the comfort of knowing they are receiving quality advice from a trained professional.

The only thing that would swing the pendulum back in the favour of the direct channel would be regulatory intervention. I can’t see how that would ever happen, or why the Financial Conduct Authority would even see that outcome as desirable.

Rather, it’s the opposite. In the postMMR and Consumer Duty world, the regulator has created a regime that encourages people to take advice in what has become an increasingly complicated market. Therefore, I’m confident the dominance of the broker market will continue long into the future.

With that in mind, perhaps some lenders should be careful not to bite the hand that feeds them. ●

2025: A better market for us all

It’s nearly the end of the year, so naturally, we all become a little more reflective. Looking back at 2024, it was clearly a challenging market, and one still in recovery mode. However, there are also plenty of positives to take into next year.

We knew coming into 2024 that there were 1.5 million fixed rate mortgages maturing, and therefore that the refinance market would be strong.

What surprised many, however, was how much stronger the purchase market turned out to be, despite mortgage rates remaining significantly higher than a few years ago. According to UK Finance, purchase lending by first-time buyers and home movers rose by 18.2% and 15.1% year-on-year, respectively, in September.

In a further sign of improving buyer confidence, house sales were up 26% year-on-year in November, according to Zoopla. There is more competition among sellers, too, with the average number of homes for sale per estate agent at its highest level since 2014.

These are encouraging signs of a market that had been subdued by higher interest rates becoming active again. That said, affordability challenges persist, with rising house prices and elevated mortgage rates continuing to price many aspiring buyers out of the market.

But the recovery is well underway, and I am optimistic about the market’s prospects in 2025.

As I write this, the consensus is that gross mortgage lending will total around £230bn for 2024, which would be an increase of just under 2% on last year. While this is positive, it falls short of the £250bn many expected 12 months ago.

Looking ahead, gross lending should reach around £250bn to £275bn in 2025, depending on the remortgageproduct transfer (PT) split.

PTs will remain a significant driver of the market next year, but borrowers who locked into 2-year deals after the mini-Budget will seek better rates, which should see more of them switching lenders. This is a huge opportunity for the market, given that 1.8 million fixed rates worth £380bn are set to expire in 2025.

Additionally, 693,000 borrowers are still on their lender’s standard variable rate (SVR). Many are waiting for rates to decrease further, but others will probably be unaware they can make savings by switching to a new rate. These people will benefit from advice.

Facing into headwinds

While the ingredients are there for a stronger 2025, headwinds remain. The economic outlook remains uncertain, inflation is sticky and swap rates remain volatile. So, while we expect the Bank Base Rate (BBR) to fall next year, it’s not a given.

Most borrowers don’t understand the link between BBR, swap rates and fixed rate pricing, meaning that advisers will be well placed to provide

STEPHANIE CHARMAN is group partnerships and propositions director at Sesame Bankhall Group

guidance – especially if mortgage rates don’t come down by as much as borrowers hoped.

We saw this in November, when fixed rates went up after the Bank of England cut rates. A repeat of this scenario is eminently possible when the central bank next reduces borrowing costs.

While the Government is pushing to boost housing supply, it will be a longterm project, and therefore the full impact might not be felt for some time to come. Meanwhile, we need to see how measures in the Autumn Budget – such as increasing the Stamp Duty surcharge for additional properties to 5% – affects the buy-to-let (BTL) sector.

With the nil-rate Stamp Duty threshold for first-time buyers reverting to £300,000 from £425,000 in March 2025, we anticipate a busy first quarter as buyers look to beat the deadline.

However, the added cost post-March could slow first-time buyer activity later in the year.

The protection market was flat compared with 2023. While Consumer Duty should boost long-term protection take-up, we understand that cost-of-living pressures and high borrowing costs will have constrained growth this year.

That said, this will continue to be a key area for advisers to remain focused on – not only to deliver a more holistic advice experience to clients, but also because the protection market is currently in the Financial Conduct Authority’s (FCA) sights.

In short, while 2025 holds plenty of promise, it won’t be without hurdles. Those who reap the benefits next year will be those who seize the opportunities before them. ●

In Pro le.

West Brom Building Society

Marvin Onumonu speaks with Jonathan Westhoff, CEO of West Brom Building Society, about 175 years of mutual success

For 13 years, Jonathan Westhoff has guided the West Brom Building Society through a period of challenges and transformation. When he first assumed the role of CEO, the society was facing a difficult period, but also an opportunity to rebuild on a stronger foundation, rooted in its original mutual principles.

e Intermediary spoke with Westhoff to discuss the society’s 175-year anniversary, its recent record-breaking financial results, and its vision for the future.

A journey through time

The West Brom’s journey began in 1849, during a time of significant socio-economic change. The post-Industrial Revolution era redefined urban areas as people migrated to cities in search of work, increasing demand for housing solutions.

However, homeownership was still a distant aspiration for many. With a growing awareness of communal support and the collective pooling of resources, mutual organisations began to take shape across the UK.

as an opportunity to reinforce the West Brom on a more robust foundation.

Modern commitments

The hard work of Westhoff and his team is evident in the West Brom’s recent financial performance. In the first half of the financial year, the society achieved the highest level of homeownership lending in its history, with nearly two-thirds of new mortgage customers being first-time buyers.

The society also lent £646m in mortgages during this period, a 41% increase compared to the same timeframe the previous year (£458m). Profit before tax increased by 26%, reaching £17.2m. Last year (30th September 2023) it was at £13.6m. This capital position enables the society to extend its support to more individuals seeking to purchase homes, and to invest for future members.

Westhoff says: “Getting 3,000 people into their first home in half a year is really significant, and it is not the end of our journey for first-time buyer penetration, that is merely a step on the journey to where we want to be.”

which prioritised profit, the West Brom’s primary

The West Brom was founded by a group of locals who recognised a pressing need. Its formation signified not just a financial initiative, but a community-driven mission to provide stability and security to its members. Unlike traditional banks, which prioritised profit, the West Brom’s primary focus was on the welfare of its members.

Westhoff’s tenure, in turn, began against the backdrop of the 2008 Global Financial Crisis, which tested the resilience of many institutions, including the West Brom.

The consequences of previous lending decisions and a global economic downturn posed a significant test for the society’s leadership.

The emphasis on first-time buyers has been a consistent theme throughout the society’s history, underscoring its contribution to community and shared ownership. Comprehensive support for members has also always been a hallmark. When it comes to the factors that make this society distinct, Westhoff says: “We don’t really see other societies as our competition. There are many business models that are different across the sector. We’re not all the same. We’re not homogeneous. We here are really clear that the mutual model itself offers distinct advantages for customers.”

was a quite toxic credit risk 15 years ago

Westhoff recalls: “What we inherited here was a quite toxic credit risk 15 years ago – massive commercial real estate exposure, and structural balance sheet imbalance.”

Rather than avoid the challenges, Westhoff viewed it

Serving the community

One of the most remarkable aspects of the West Brom’s longstanding history is its commitment to supporting financially vulnerable customers.

The society’s approach to

JONATHAN WESTHOFF

community lending is designed with empathy and support in mind.

Westhoff says: “We’re one of the few [lenders] that does not charge any arrears to add to their burden. We see that as part of mutual support; customers who are paying are supporting those that are not able to for a while.”

This philosophy of mutual support positions the West Brom as a compassionate lender that seeks to empathise with its members during difficult times, rather than profit from their struggles.

Additionally, the society has pioneered initiatives aimed at significantly supporting first-time buyers and shared ownership clients. From Westhoff’s perspective, these segments are frequently overlooked by mainstream financial providers, which often lean towards more lucrative opportunities. The West Brom has dedicated itself to changing that narrative.

For example, Westhoff says: “We’ve taken a strong view of the quality of first-time buyers in the new-build market. There’s always been a fear that there’s too much of a premium in newbuilds that puts a risk in – but we take a different view, as we see new-builds being built to higher environmental standards, that they do actually have a premium quality to them.”

A nod to the future

The West Brom is not resting on its historical successes, but is keenly aware of the need to adapt and innovate.

Westhoff says: “Technology is going to be pretty instrumental. We are on the cusp of stepping right into the physical delivery of that transformation, and you have to be very aware of how that involves many more people around the business than just the technology people. It’s a very farreaching change we’re looking at.”

A central principle of this is strengthening relationships with intermediaries. He adds: “It’s our intermediary partners that do that for us. They represent what’s different about us.”

These relationships enhance its offerings and facilitate better connections, reaching a broader audience and maximising the potential for members to benefit from competitive products.

Furthermore, the West Brom is actively working to reposition its branch network, placing a strong emphasis on growth in local communities.

“We want to drive that forward in the next year and be the community,” Westhoff explains. “We’re looking at community hubs in places, and we’ve seen some great initiatives from other societies.”

The balance between digital innovation and community engagement is crucial. The society must continue to evolve technologically without losing sight of its deep-rooted connections to its

members. Westhoff says: “We want to continue to be a proactive part of our customers’ lives.”

The society has slowly transformed its products based on the market’s changing demand. For example, it has evolved from traditional savings accounts to more sophisticated offerings, such as Individual Savings Accounts (ISAs).

The society’s dedication has also extended to understanding how it can attract and retain younger members. Westhoff says: “We constantly remain relevant to every generation for 175 years. Our challenge is to ensure our brand is understood by the next generation.”

This is not just about marketing and product offerings; it involves a cultural shift towards transparency and accessibility, fostering trust within an increasingly cynical financial landscape.

Enduring purpose

As the West Brom looks beyond its 175th anniversary, it carries with it fundamental values that have propelled the society over time.

Westhoff says: “Profit is only an enabler. I know everybody talks about purpose-led lending. What we hope our results demonstrate is that this really is purpose-led lending.”

This is a legacy that extends far beyond its most recent financial results. It reflects a strong connection built on community involvement, customer-focused service, and a belief in the power of mutual support. According to Westhoff, the society demonstrates the lasting values of cooperation and community spirit, echoing the core beliefs of its founders.

Moving forward, the West Brom is focused on making financial products more accessible and relevant in today’s fast-paced world. Westhoff concludes that the society values adaptability, compassion, and the principle that its primary goal is to serve its members’ best interests. ●

West Brom in the 1950s

Maintaining a nger on the home condition pulse

As the property market continues to evolve, ﬁrst-time buyers (FTBs) remain a key demographic, navigating an increasingly challenging landscape, characterised by rising house prices, stricter mortgage criteria, and ongoing aﬀordability concerns.

This generation of FTBs is both more cautious and well-informed than ever before, yet they still face knowledge gaps when it comes to understanding the intricacies of the homebuying process, especially regarding the importance of home condition surveys.

In a market where FTBs need all the support they can get, mortgage intermediaries have a unique opportunity to impart their expertise and arm buyers with the conﬁdence and peace of mind to make one of the costliest and most emotive decisions they are ever likely to make. However, despite the undeniable beneﬁts, many

buyers are still skipping this vital step. Recent data from the Q3 2024 Countrywide Surveying Services (CSS) Home Survey Trends Index shows only 16% of buyers commissioned a home condition survey.

While this is an improvement from the previous quarter’s 10.6%, it still means that the majority of buyers are potentially exposing themselves to signiﬁcant risks.

For many buyers, a property can look perfect on the surface. However, hidden defects – whether it’s structural issues, damp, or faulty wiring – can go unnoticed without professional inspection. These issues can result in signiﬁcant and unexpected repair bills. A professional survey highlights potential problems early, providing homebuyers with the insight they need to make informed decisions, negotiate on price, or budget for repairs.

The perceived cost of a survey may seem like an unnecessary expense in an already costly process. However,

MATTHEW CUMBER is managing director at Countrywide Surveying Services

the reality is that these costs are relatively small compared to what could be faced if hidden problems are discovered a er the sale.

According to Q3 2024 data, the costs of diﬀerent surveys are as follows: RICS Home Survey Level 2 - £468; RICS Home Survey Level 3 - £890. These costs may well pale into insigniﬁcance when compared to unknown issues which might not be immediately visible to the untrained, non-professional eye – issues which could lead to unexpected costs running into the tens of thousands of pounds in some cases.

Key takeaways

For mortgage intermediaries, the above helps to demonstrate the ongoing importance of eﬀective communication.

Clients value a seamless end-to-end experience, clear and understandable reports, and the ability to engage with surveyors for guidance.

The ﬁndings also stress the need for broader consumer education across the property industry to ensure that buyers are making informed ﬁnancial decisions.

As property transactions become increasingly complex, the role of intermediaries in educating clients about the value of home condition surveys is more important than ever.

By promoting awareness and ensuring eﬀective communication, intermediaries can successfully guide clients throughout the homebuying journey.

These eﬀorts are not only critical for securing the property in question, but can also help cement longer-term relationships and encourage valuable referral business.

‘Client value’ should be the mantra

Deﬁning ‘cheapest’ in the context of a mortgage should be a fairly easy task. Certainly, it’s hardly surprising that the default position on any sourcing system is set to bring up the deals usually based on an eye-catching headline rate.

Most experienced advisers tend not to accept the ﬁrst cut appearing on their screens, seeing it as just the opening sort through of potential lending sources for a customer. The ‘cheapest option’ ﬁrst cut tends to be based on very li le substantive criteria, and this is where the issues tend to crop up.

An assumption that advisers are going to recommend a more expensive option to customers if there is an obviously more suitable lower cost alternative wrongly suggests that in some circumstances advisers today are either gaining some pecuniary advantage or are not looking hard enough to ensure customer value.

With the rise of specialist lending and the growing number of applicants whose proﬁles do not ﬁt the ‘high street’ template, many mortgages with the ‘lowest’ rates are out of the question, regardless of the desire to secure them.

Hidden costs

Let’s also take into account the issue that what may look a ractive at the outset might not be the most costeffective long-term. For example, does the ‘cheapest’ scenario include the fees charged to the borrower on the mortgage? Also, a fixed or discounted rate might look to be cheaper during its term, but what difference does it make to the overall cost when that mortgage reverts to a standard variable rate (SVR)?

The evidence, such as it is, suggests that in most transactions, advisers are doing their jobs correctly despite the lack of a deﬁnition of ‘cheapest’, because real advice should take into account all the variables that come up in the initial assessment,

and then apply those to the most appropriate solution.

Given the tendency for retrospective analysis of past advice, a topic like this requires greater clarification now to agree a wider definition and dispel concerns over action taken years in the future, when justifications for today’s recommendations are more difficult to prove.

Let’s replace the word ‘cheapest’ with ‘value’. Overall value should not be limited to the headline pay rate, but take into account fees charged at outset, the current SVR charged over the mortgage’s initial stated term, and assuming for the purpose of illustration that the mortgage runs to term. This creates a more accurate and level playing ﬁeld and be er illustrates true value to adviser and customer ●

CHRISTOPHER TANNER is CEO at HLPartnership

The Inter view.

Together

market, Elmaz says: “One of the obvious takeaways is the con rmation that we’re on the verge of a revival in the residential market. e sentiment has been there, and it’s nice to be able to put the weight of the research behind it.”

She points to the projection of a 15% rise in the number of residential transactions in the next ve years, adding: “ ere’s a nice, steady, realistic but positive outlook, in general.”

Jessica Bird speaks with Tanya Elmaz, director of sales at Together, about specialist residential trends and the outlook for 2025

In October 2024, Together produced its Residential Property Market Report, the result of multiple studies taking a deepdive into the housing market, buyers’ lifestyles and concerns, their ambitions for the near and long-term future, and much more.

e report touched on many areas a ecting residential buyers, but some results and trends emerged overall, creating an interesting picture of the growing specialist lending market.

e Intermediary sat down with Tanya Elmaz, director of sales at Together, to get her take on the key ndings, the future of specialist nance, and the lender’s own approach to growth in 2025.

Specialist growth

When asked what stands out most from the survey, amid a wide range of ndings both looking back and forward at the residential

Homeowners looking to move in the next 12 months 16%

More than this, however, what strikes Elmaz is the projected growth of specialist lending within this rising tide of resi transactions.

“We forecast growth of 70% – from £32bn to £54bn – by 2029,” she explains.

“ at’s pretty seismic, huge growth. As a specialist lender we always talk about the growth and importance of our market, but 70% in any market is quite special.” is growth of specialist lending is supported by the nding that 33% of mortgages fall into the specialist category – projected to rise to 40% by 2029.

From a perspective outside the specialist market, some might not be surprised that at a time of widespread nancial uncertainty and a ordability constraints, the specialist market caters for a third of mortgages.

However, Elmaz points out that this is not just due to, say, a rise in adverse credit, which might be expected to drop again if and when stability returns in the coming years.

She says: “ is is about how specialist lending has been – and in some instances still is –viewed. at topic of adverse credit, for those not au fait with the specialist lending market, is the rst thing many are drawn to.

“ ere is some reality in that. Yes, the costof-living crisis, Covid-19, in ation and economic turbulence have all led to more bumps in the road for a lot of people with regards to credit. But that’s not the only thing that specialist lending o ers, and it’s not even the majority of what specialist residential lending is.”

Elmaz points to the growing trend of selfemployment and non-traditional work or income structures. Here, rather than borrowers in dire straits, specialist nance is able to cater for those working for themselves and carving out their own businesses. is is the other side of the coin from credit and a ordability challenges, with the pandemic fuelling a deep change in the way the UK lives and works.

As a specialist lender you have to have a unique way of looking holistically at an applicant’s a ordability, o en from a completely di erent angle”

“ at’s the crux of this change,” Elmaz explains. “It’s a change in the way that we live, and we work, and want to earn money. is might be contract work, three part-time jobs, having an online business, being self-employed – it’s all part of wanting to earn our money, live, work and travel in a di erent way.

“It’s all part of an evolution that means ‘specialist’ isn’t as specialist as it used to be.”

Flexible approach

As diverse working patterns and income streams become the ‘new normal’, alongside the more negative trends – such as a ordability challenges – that are leaning more borrowers toward specialist products, there is an argument that the high street needs to catch up, as its cohort of more straightforward borrowers looks set to continue dwindling.

Elmaz says: “ ose types of customers – and there’s more and more of them – have di erent needs and di erent ways of proving income.

She adds: “ e high street has, for a long time, not wanted to dip its toe in the specialist market, and has made itself distinctly di erent in its appetite and approach – automation, for example, is not always easy to use with more specialist lending needs.

“However, having been in the industry for 25 years, every year we do see more high street lenders looking at specialist areas over their shoulder with a keen interest – never more so than over the past two or three years.”

It is not as simple, however, as the mainstream banks simply turning around and deciding to broaden their product portfolio or criteria to catch more of those residential borrowers currently being served by the specialist market.

ere are some fundamental factors in the way that funding, risk and lending are established at these institutions that makes this far more complex.

For example, Elmaz explains, these lenders o en do not have the risk appetite

or commercial approach necessary to handle more complex borrowers.

erefore, while the rise in specialist needs might lead to “the odd criteria point change” here or there among the high street lenders, their lending appetites are unlikely to change in a broad sweep.

ere will always, then, be a distinct di erence between high street and specialist lenders, even as specialists take an ever growing market share.

“Understanding complex clients means having a bespoke approach,” Elmaz explains.

“Self-employed people have unpredictable income patterns, and similarly, high net worth [HNW] customers have complex income streams.

“As a specialist lender you have to have a unique way of looking holistically at an applicant’s a ordability, o en from a completely di erent angle.”

Together, for example, has built in the ability to take di erent income streams into account, be exible when calculating what is a ordable, look at someone’s “credit behaviour, not their credit score,” and use forecasted income and business plans where needed.

Number of self-employed workers in the UK

2000: 3.2 million 2024: 4.3 million

Projected house price increase between 2025 and 2029 17%

Borrowers considered ‘specialist’ who have never tried to get a mortgage 40%

“We take all income into a pot, and have a broad depth of what we look at,” Elmaz explains. “Sometimes with a bank you have to hit a certain metric to have a product set open up to you, but we have a very exible way of looking at cases.”

Leverage experience

In order to take this malleable, holistic approach to each individual case, it is important to have a business stocked out with a broad range of expertise, as well as the ability to take a common-sense approach to new problems and puzzles.

Even a er 25 years in the industry and almost 10 at Together, Elmaz says she still o en comes across new challenges and cases she has “never seen before.”

She adds: “ at’s interesting and delightful, and it’s also great that we can still nd solutions. For a true specialist lender, you rarely want to say an outright ‘no’ – the answer might be, ‘we’d want to do it like this’ or ‘we can do it like that’. I don’t know that there are high street banks that can work in that way.”

On a practical, decision-making level, Elmaz points to the importance of having underwriters who have “been in the business for a long time,” and who pair this with a deep understanding of the rm’s criteria and appetite. →

“We have a tolerance we can take a view on, and that’s how we approach our criteria,” she explains. “So, on our product card it might say ‘70% loan-to-value [LTV], higher upon referral’. We always want to have that conversation with brokers and customers and see what we can do, if it’s the right transaction.”

Not only does this come down to internal experience, but there is also an important role to play for the broker and their own relationship with the lender, as well as trust in their expertise.

“We want to understand their customer’s borrowing needs, and trust them to package that case in the best way possible,” Elmaz says. “We can’t always say yes, but we’ll always have that conversation.”

e experience and relationships have been established at Together over the course of 50 years in business, celebrated this year.

Elmaz says: “We’ve got some phenomenal, well-established relationships with packagers, brokers, introducers and customers, which is really key.”

Changing the narrative Broker relationships are key to the continued strength of the business, as well as the wider specialist market.

Elmaz explains that Together ensures that packagers and brokers are kept up to date and informed, with a resource hub, newsletters, meetings and a presence at expos, to name a few. She adds that the process is also mutual, gathering feedback on product launches, for example, and ensuring that the lender is providing the best possible options.

Moving forward, however, Elmaz notes that it is not just about keeping up to date those brokers – and indeed borrowers – already engaged with and aware of the specialist market, but addressing the continued lack of awareness that stops many from branching out into this product set.

e Residential Property Market Report showed that a considerable proportion of those borrowers whose needs placed them within the specialist eld had simply never tried to get a mortgage, suggesting that many simply assume they cannot be helped, and do not discover the options available to them.

“ ere’s de nitely a gap that needs to be bridged, and it’s not something brokers can do on their own,” says Elmaz.

“One of the ways we try to access those consumers is through a di erent type of broker. We’ve got a lot of experience with specialist brokers and packagers, but we’re trying to

Borrowers concerned about impact of costof-living crisis on applying or remortgaging in the next 12 months

59%

forge our way into working with brokers from the high street, who may not be as wellequipped for the specialist products.”

To this end, Together has so -launched its club and network proposition this year, using these relationships to forge connections with brokers whose customers do actually t within this market.

Elmaz says that this taps into a growing trend of diversi cation among brokers, who are realising they need to branch out into di erent product sets to ensure the success of their own businesses, rather than “stay in their lane.”

Number of people who have experienced nancial di culties

2022: 17%

2024: 23%

As customers either have needs that cannot be met by the mainstream, or indeed grow increasingly aware of alternative options themselves – such as second charge, for example – brokers that do not at least consider these products, and know where to look, risk customers going somewhere else.

“You can’t learn it all, and that might not even be what you want to do,” Elmaz adds. “But brokers at least need to acknowledge it.”

Positive outlook

First-time buyers’ views on achieving homeownership in 2025

Likely: 26%

Elmaz reinforces the message that the growth in the specialist market is deeply positive, not least because it means that previously underserved customer segments are getting the support they deserve.

Unlikely: 60%

“Whatever your personal scenario is, specialist lending is successful because it meets the needs of the borrower,” she adds.

With a greater sense of catering for the client holistically, rather than restricted to speci c products, comes the ability to handle shocks and turbulence, and the e ects these have on borrowers’ needs. is has been proven many times over the past few years, and not least during the “turbulent economy” of 2024.

Looking back over the year as it ends, Elmaz notes that 2024 has been more stable than 2023. While geopolitical challenges have remained, and a change in Government always brings upheaval, Together itself has gone through a period of success and growth across second charge, buy-to-let (BTL) and bridging.

“ e biggest take-away from 2024 is that growing need, and the growing number of scenarios, for specialist lending,” Elmaz says. “More brokers want to talk to us and nd their way into the specialist market.

“People still want and need to move, despite some more negative rhetoric about the market at di erent points of the year.”

Homegrown talent

During this time, one of the key challenges to

get right has been ensuring the right talent is deployed to meet demand and support the business’ growth.

While “homegrown talent” is key to Together’s success, Elmaz also highlights the need to pull fresh candidates into the market in order to ensure its continued strength as it grows.

“Understanding the specialist market can be a challenge,” she explains. “ ere’s a lot to know, especially if, like Together, you o er a really broad solution set. at’s a lot of information, knowledge, commerciality, that individuals need to have. at could be a challenge going forward.”

To this end, Together uses apprenticeships and graduate programmes every year, as well as focusing on movement between departments and ongoing development to deploy people to their best ability.

In order to underpin the rm’s own values, she explains that Together looks for a “solution mindset, ability to think outside the box and a ‘can-do’ attitude” in order to nd people who “lend themselves to our lending decisions.” is focus on good sta ng has been one of the elements allowing Together to adapt and continue to grow despite the turbulent environment of the past few years.

“We have had to change our pricing in line with the market and in line with our funding abilities,” Elmas notes. “We’ve continued also to adapt with product enhancements. While we have a broad range of products, we’re always looking to tweak our criteria where we can.”

She predicts that during 2024, Together made around 20 to 30 smaller changes across its product range based on broker feedback.

With an £8bn loan book, including nearly £320m in lending across about 1,600 deals in November alone, Together has shown its strength in 2024. Elmaz says the rm also spent this year assessing internally, including its tech and processes, streamlining where possible, and considering how these things can be evolved moving forward.

2025

Looking ahead, Elmaz notes that the trend of borrowers becoming more educated – and therefore interested in specialist products – is likely to continue bolstering the market.

While the UK continues to struggle with the economy and the pace of recovery, a ordability will still be an issue for many, and a challenge both the mainstream and specialist markets have to face. Nevertheless, Elmaz suggests that borrowers, in part due to a growing

While we have a broad range of products, we’re always looking to tweak our criteria where we can”

awareness of the ins and outs of this market, are getting more comfortable with the new normal of higher rates.

With something of a return to normalcy, concerns that took something of a back foot during the past couple of years, like the green agenda, will likely re-emerge in 2025.

Elmaz says it’s “still too soon” to see what impact Labour will have, but hopes for a greater focus on a ordable housing, better planning laws to meet the stretch of its ve-year targets, and greater support to “reenergise” the rst-time buyer market.

Wishlist for Labour

More social and a ordable housing (24%)

More help for rst-time buyers (12%)

Housing and planning reform (29%)

Tackle the cost-of-living crisis (70%)

Invest in the NHS and healthcare (68%)

Number of regulated mortgages that currently fall into the specialist category 1 in 6

She warns that with rent caps under discussion and the continued evolution of Consumer Duty, regulation is worth keeping an eye on as the next year rolls round, as is taxation, particularly around the continued impact on BTL.

Overall, Elmaz calls for a more holistic understanding of housing from the Government, recognising that, as deposit and a ordability issues continue to cause potential rst-time buyers to stay as renters, they depend on the BTL market. Better than simply resorting to rent caps, then, is to consider the market as a whole organism – keeping rents at a reasonable level is going to be better served by initiatives that reduce the strain on the private rented sector.

“ e more we can incentivise rst-time buyers and build a ordably, the better,” Elmaz explains. “ e Government has a big job to do.”

For better or worse, 2025 will be an interesting year for the property market. For Together, the outlook is one of positive evolution. With its 50th birthday under its belt this year, Elmaz says “to have that experience is quite special.”

Building on this, and planning for another 50 years ahead, Together is focused on tech transformations back and front of house, becoming “even more agile and quick to come to market with new products,” and exploring the ways that innovations like arti cial intelligence (AI) can improve this space.

All of this will be underpinned by the drive to grow in a way that gives “more and more brokers and borrowers access to fantastic solutions.” ●

A vital role to play in the housing crisis

Renting a home in the UK is too often presented as secondbest – a stop gap while saving to get on the property ladder.

Yet that ladder is increasingly out of reach. Research published by Zoopla in July revealed that half of UK homes (15 million) increased in value by more than 1% in the first half of 2024. Overall, the value of the average UK home went up by £2,400.

Changing priorities

Many younger people have no hope of buying a home. More than four in 10 British adults under the age of 40 who do not currently own a home are now ‘Guppies’ – young people who have ‘Given Up on Property’, according to research by Zoopla last year. Nonhomeowning under-40s are now more likely to be living with their parents than they are to be in the process of buying a home, or planning to. Those who have given up on a home cited the cost-of-living crisis, increasing house prices, and higher mortgage rates as the main reasons.

There are also plenty of stories in the media about younger people globally choosing to spend on experiences over property. Research by Eventbrite found that 78% of Millenials would choose to spend money on a desirable experience or event over buying something.

With these factors in mind, renting is here to stay. The rental and buy-tolet (BTL) market are very important contributors to housing supply, and rarely has there been such a high demand for decent rental properties.

Data from the Office of National Statistics (ONS) suggests that average UK private rents increased by 8.7% in the 12 months to May 2024.

Our latest landlord survey found that nearly 85% of buy-to-let landlords plan to raise rents in the next year, jumping from 61% in the previous

survey last year. The reason for increases was largely down to higher interest rates and operating costs.

Rhetoric and reality

With more people now tenants, renting should be seen as a positive choice, just as it is in other countries such as Switzerland and Germany. According to the World Economic Forum, these are firmly rental societies where, in 2020 to 2021, around two-thirds of people didn’t own their homes

But poor perceptions of renting and of landlords could risk forcing decent properties out of the market, worsening the shortage of good rental properties. In our landlord survey in the spring, we found that landlords were worried that an anti-landlord rhetoric, or landlord-bashing, was taking hold. These sentiments seemed to be attached to uncertainty about upcoming legislative reforms.

Since our survey, the Government has published its Renters’ Rights Bill. Good landlords agree that there is some need to overhaul renters’ rights. Reform has long been on Labour’s radar, forming a key part of its election manifesto.

Nonetheless, our research shows that landlords have significant concerns about the new Bill, particularly around ‘no fault’ evictions. While no decent landlord

ROB STANTON is sales and distribution director at Landbay

would object to tenants being treated fairly, landlords argue that the property owner deserves the same rights.

If new reforms are perceived to be unfair, the danger is that decent landlords – who provide much-needed housing – may leave the market. This could exacerbate the existing shortage of affordable homes and push rents even higher.

Instead, it will be vital not to throw the baby – the many good landlords –out with the bathwater.

Fair and proactive Government policies will be crucial in ensuring that renting can be a positive choice, rather than a last resort.

Rental properties can and should offer secure, affordable and highquality housing.

In the meantime, landlords and tenants can take heart from lessons from history. The buy-to-let sector over its 30-plus year history offers a master class in resilience. Not only has it survived economic crises, political turmoil and regulation changes throughout the years, but it continues to thrive. While there’s no shortage of challenges, opportunities for all certainly remain. ●

Investors should see change as opportunity

Savvy investors should see the changes in the Budget as an opportunity.

The Stamp Duty hikes are openly a way to slow down investor purchases and prompt more first-time buyers to get on the property ladder – but should it deter investors? In my opinion, quite the opposite.

We’ve all heard about how some of the wealthiest people got to their position in a bad market. Recessions, economic blips, and so on. The Stamp Duty hike is to try and put off the average investor. But those who are experienced, or willing to obtain tangible advice, should be thinking differently.

It’s actually a way of desaturating the buy-to-let (BTL) market – a simple rule of supply and demand. Of course, we don’t particularly want house prices to decrease, and market growth is paramount for the economy and industry. But now, BTL landlords have a reason to negotiate a little harder. There are going to be fewer investors in the market – less competition.

The Labour Government could have created one of the easiest bargaining tools out there. A ready-made reason why a landlord’s purchase offer is a little less than the seller might have hoped. It almost takes me back to when any house priced ever-so-slightly above £500,000 was a pointless exercise – with banded Stamp Duty, everyone offered £500,000 on the nose, or less.

Landlords, in my eyes, should take this as an opportunity to look at those potential purchases that have sat on the market a little bit longer, and snap them up.

For those who detest the changes, all might not be lost. Again, it forces keen landlords to seek out a new

opportunity – perhaps something a little different.

Beneath the surface

Investors shouldn’t just look at the surface – BTL investing has far more layers than meet the eye. There are properties out there, too, that don’t quite fit the mould when it comes to Stamp Duty. Granted, lending options may be few and far between – but is this then an opportunity for lenders to broaden their appetite?

Some types of student accommodation, for example situated within halls of residence, are actually not included in the scope of the Higher Rates for Additional Dwellings (HRAD), according to Gov.uk.

Landlords willing to do the research might find ways to avoid Stamp Duty completely if they fall under the thresholds. This is where brokers and property tax advisers could work closer than ever.

These changes might see brokers getting busier than they had previously expected on the buy-to-let front. More landlords who are seeking ‘against the grain’ investing might want to look at their existing portfolio, refinance it, capital raise, and perhaps go for investments that could, now, be more lucrative.

This may prompt some cash purchases going forwards, after landlords look to refinance their existing portfolio, pulling out some unused equity and snapping up investments that lenders aren’t particularly ‘au fait’ with as of yet.

Make a difference

This is where I feel we could, or should, see some further shake-up in the industry. We’ve seen it over the years with investment types such as social housing, which is ever more

popular with investors today. With landlords going for the more niche type of investment, we might see more lender appetite. Then, the market booms again. It’s a cycle.

Budget decisions will force critical thinking, not just with us in the industry, but landlords themselves.

With regards to the higher-end market – London and the surrounding area – will there be a BTL slowdown? Quite possibly, for a while. It’s a little different paying 2% extra Stamp Duty on an £80,000 investment, compared with a £1.5m one. But as ever, it’s relative. Those investing in that category are likely doing so for the long-game. A two-decade investment, banking on future price rises, means inflation does lots of the work for them.

So, will there be immediate nervousness? Sure. But the dust will settle and people will be inventive.

Something that’s out of our industry’s control is how investment property opportunities will be presented to a would-be investor by the estate agent. Right now, the relationship between brokers and agents needs to be as synergistic as ever to make sure the market can still progress forwards. We need proactive agents who want to drive forwards.

Lenders, in my opinion, also need to become more comfortable with property marketed by investor-focused agents, as they’ll be driving the market forwards in a positive way.

To summarise, in my eyes, buyto-let isn’t dead. It’s a new chapter. The thinkers, the planners and the executers will be the ones who can capitalise in a post-Budget market. As brokers, we must be prepared to support them. ●

JONATHAN FOWLER is founder and managing director at Fowler Smith Mortgages & Protection

New opportunities for brokers and their clients

Buy-to-let (BTL) landlords have been facing significant challenges over the past year or two.

Higher mortgage interest rates, tightening credit conditions, a weak property market, increasing regulatory constraints and low rental yields in some areas are pushing landlords to reconsider their financial strategies.

As BTL profitability comes under pressure, mortgage brokers are uniquely positioned to guide their clients through this turbulent landscape, offering solutions that go beyond traditional financing methods.

Market under pressure

Mortgage brokers understand the pressures landlords face better than anyone. High mortgage rates and a reduction in tax relief under Section 24 have, among other things, squeezed margins for many property investors.

Meanwhile, the demand for capital – whether for BTL property refurbishments, portfolio expansion or managing unforeseen expenses –continues to grow.

Traditional financing options, such as further advances and remortgaging with a higher loan amount, are not always easily available, and other options such as second charge mortgages and bridging loans may not be an ideal fit in the current environment. Many landlords are hesitant to increase their debt interest burden.

For brokers, this presents a challenge: how can they support clients who need access to funds but

are wary of taking on an additional debt interest burden?

Emerging solutions

Home equity financing offers a fresh approach. Unlike traditional debt financing, this model enables property owners to unlock a portion of their home’s equity value in exchange for a share in its future appreciation potential. It is an alternative that aligns the interests of the property owner and the financing provider in home equity.

This approach has gained significant traction in the US, where it has proven to be a valuable tool for homeowners and investors alike.

By introducing this innovative solution to the business BTL market in England and Wales, we are addressing a gap in the financial ecosystem for landlords and property investors.

How it works

Home equity financing provides landlords with a lump sum payment tied to the value of their property. In return, the financing provider receives a share of the property’s future appreciation and a portion of its rental income over an agreed period.

For mortgage brokers, this represents an opportunity to:

1 Expand their service offering: They can differentiate themselves by providing clients with access to nontraditional funding solutions.

2 Increase client retention: Brokers who offer creative solutions are more likely to build successful longterm relationships with their clients.

3 Add value without conflict: Home equity financing complements

rather than competes with existing mortgage products.

Home equity financing is still a relatively new concept in the UK. Pauzible enables business BTL landlords and property investors to unlock up to 10% of their property’s market value for a term of five years, with the option to terminate earlier.

In return, landlords pay a monthly premium of up to 10% of their rental income and repay up to 14% of the property’s future market value at the end of the agreement.

Repayment terms are proportional to the percentage of equity being accessed. For example, unlocking 5% of a property’s value results in a premium of 5% of the rental income and 7% of the property’s future value (1.4-times the percentage of the equity accessed).

This model provides landlords with access to vital funds for property improvements, portfolio expansion or other investments, without the burden of increased high interest debt.

Trends shaping demand

The demand for alternative financing solutions is growing as landlords seek more flexible ways to manage their investments. Key trends driving this include:

ɐ Energy efficiency regulations: Many landlords are under pressure to upgrade properties to meet stricter Energy Peformance Certificate (EPC) requirements, often requiring significant capital.

ɐ Portfolio expansion: Despite the challenges, many investors are keen to take advantage of falling property prices to expand their portfolios.

PRATEEK SOLAPURKER is co-founder of Pauzible UK Ltd

ɐ Rising operating costs: With higher mortgage repayments, landlords are seeking ways to maintain profitability or break even without reducing their holdings.

Home equity financing is uniquely suited to address these needs, providing landlords with the flexibility needed to adapt without overextending themselves financially.

Why this matters

As trusted advisers, mortgage brokers play a crucial role in connecting clients with solutions that meet their needs.

By partnering with a home equity financing provider, you can offer a compelling alternative that helps clients achieve their goals while positioning yourself as a forward-thinking professional.

Moreover, integrating home equity financing into your offering could open new opportunities to grow your business. For example, clients who successfully access capital for refurbishments or new investments may turn to you for subsequent mortgage products, creating a virtuous cycle of growth and loyalty.

Meeting the moment

The UK property market is at a crossroads, with challenges and opportunities in equal measure.

Mortgage brokers are uniquely placed to guide landlords through this period of uncertainty, leveraging innovative solutions such as home equity financing to provide tailored, effective strategies.

By expanding your toolkit, you can help your clients navigate financial pressures, seize new opportunities and secure a stronger future for their investments. ●

Meet The BDM

Redwood Bank

The Intermediary speaks with Andre Parcian, business development manager (BDM), Midlands and Wales at Redwood Bank

How and why did you become a BDM?

I started as a relationship manager at NatWest in business and commercial banking, looking a er small to medium enterprise (SME) customers.

I always had a passion for developing new relationships, and this led to me being invited to join a pilot project as a BDM with NatWest to relaunch its broker proposition.

My focus was to build a new panel of brokers and help launch NatWest’s mortgage products into the broker market.

I enjoyed developing new partnerships and working with brokers to help nd ways to

grow both their own and their clients’ businesses.

What brought you to Redwood Bank?

I joined Redwood during Covid-19 in 2021 – a strange time perhaps to change role, but I could see Redwood Bank was delivering for SMEs during the pandemic.

Small businesses were becoming an increasingly under-served market. e high street banks were struggling to meet their needs. I was excited at the opportunity to join a new specialist business bank that had proven itself nancially and with brokers, and to be part

of helping Redwood to grow in the future. I appreciated the tailored approach Redwood Bank took for its customers, and that it took the time to properly understand the customer’s situation.

I liked the appeal of a smaller organisation, where there is more autonomy and the opportunity to contribute to Redwood’s strategy and future direction. I also wanted the more exible approach you can have for brokers and your colleagues in a specialist, smaller lender than you might in a larger bank.

Another important di erence was having direct access to CEO Gary Wilkinson. I could contact him at any time if I needed to give feedback from my brokers.

What makes Redwood stand out?

We are powered by our people, and we genuinely care for every customer and broker we interact with. Our lending team genuinely wants to deliver the very best service and experience for our brokers and customers.

Our tailored approach and experienced team mean we can assess each deal on its own merits. is that means we see every deal through from start to nish, even when it’s complicated; for example, where there’s a bare trust or a complex ownership structure.

We take the time to understand the situation properly, allowing us to tailor our o er for customers while also maintaining our own diligence in our lending decisions.

ese deals can be di cult or time consuming, but we’ll see it through where other lenders might pull the plug.

What are the challenges facing BDMs right now?

Overall, the market remains very buoyant, so managing case volumes and supporting brokers to get their deals drawn down in a timely way is a constant and positive challenge.

It has been a year of uncertainty, though, reaching a peak at the October Budget, and we know professional landlords and investors have had challenges with interest coverage ratios (ICRs) and yield in the current interest rate environment and with rising costs.

roughout these challenges, it has been important for BDMs to remain calm, not be distracted by the speculation that was rife in the rst nine or 10 months of the year, and to focus on helping brokers and their clients nd the solutions they needed from Redwood Bank.

At the end of the day, our role as a BDM is to keep the broker updated on their case, look ahead to help them avoid any pitfalls and delays

and to motivate our lending team to complete the case as quickly as possible.

What are the opportunities for BDMs?

BDMs have direct access to the heartbeat of our industry – our brokers – and that is a hugely privileged position.

It is important that BDMs use this privileged opportunity to act as the bellwether for their organisation, providing information to shape product design, technology and processes.

At Redwood Bank, our CEO and senior team have been meeting with our brokers to receive this feedback rst-hand.

Making the brokers’ voice heard at the top table is a critical part of how Redwood Bank continues to evolve its proposition and service to its brokers and customers.

2025 is set to be another challenging year, as landlords and property investors roll o lower interest rate deals – even with the direction of rate changes now falling, the di erence will still be a shock to current yields.

We will continue to review our products and policies to help landlords transition and nd the leverage they need to grow their businesses.

How do you work with brokers to ensure the best outcomes for borrowers?

We leave no stone unturned and take a tailored underwriting approach from the outset to help avoid complex cases falling through later. We take the time to review each case on its merits, and this conscientious approach helps to save delays. is makes the whole process smoother. Take one recent example, where a landlord with a semi-commercial asset was looking to raise capital and had encountered issues with their

planning permissions. A member of our credit operations team provided a concierge service for the deal to get it to completion.

ey liaised with the broker, the valuer and our solicitors to make sure there was swi and clear communication across all parties.

It is this type of service that helps us make a real di erence for brokers and their clients.

What advice would you give potential borrowers in the current climate?

Make sure you have a trusted broker who can act as your partner to nding the nance you need to grow your business.

Look for brokers who have membership of National Association of Commercial Finance Brokers (NACFB) and Financial Intermediary and Broker Association (FIBA), and have the experience of handling property landlords or investors.

A good commercial broker will be able to nd products that suit your needs and requirements.

And always have a good solicitor and accountant – they must understand and have experience of rms involved in property investment and buy-to-let. ●

Redwood Bank

Established in 2017

Products

◆ Mortgages for professional landlords and business owners

◆ Property refurbishment products

◆ 2-year, 3-year and 5-year xed rates and interest-only available

◆ Mixed-use properties considered

◆ Green Reward cashback for energye cient landlords

Contact andre.parcian@redwoodbank.co.uk

Helping landlords achieve HMO and MUFB ambitions

Picture a tenant living in shared accommodation, otherwise known as a house of multiple occupation (HMO).

What’s the first image that springs to mind? If you’re of a similar vintage to me and remember the anarchic 1980s comedy ‘The Young Ones’, you might think of a student similar to Rick, Vyvyan, Neil or Mike, who all shared a grotty house.

Fortunately, things have moved on a long way since then. Tenants rightly expect a lot more from a property, and you’re now more likely to find comfortable properties with wi-fi as standard than you are dingy houses with old second-hand furniture.

In case you’re not familiar, a HMO is a property rented out by at least three people forming more than one household who share lavatory, bathroom or kitchen facilities with the other tenants. A statutory licence is required for all HMOs with at least five tenants forming more than one household who share facilities, and local councils have the power to put additional licensing requirements in place to cover smaller properties.

With their ability to consistently generate higher rental yields

compared with single let properties, it is no surprise that increasing numbers of landlords are diversifying their investments and exploring the opportunities.

In fact, according to research by Pegasus Insight, HMOs generate significantly higher average rental yields compared to other property types, with landlords who rent on a ‘per room’ basis achieving a typical yield of 7.1% compared to the average of 6.5%.

HMOs also give landlords peace of mind of knowing that, due to separate tenancy agreements, void periods are spread out and only affect a proportion of the income, reducing the risk of overall payment shortfalls and falling behind with mortgage payments.

A new generation

While students still make up a large percentage of those living in HMOs, these days you’ll find a variety of people living in shared accommodation.

It may be a young professional looking to keep the costs down as they work their way up the career ladder. It may be a key health worker wanting to base themselves close to a hospital. It may even be someone going through a

ROSS TURELL is commercial director at CHL Mortgages

divorce or separation who can’t afford to buy or rent a place on their own.

The diversity of different tenant types means there’s a growing demand for living spaces where toilets and showers are included within their rooms.

Add kitchenettes to the equation and you could have multi-unit freehold blocks (MUFBs) with shared utilities, or even hybrid multi-units that incorporate both self-contained and HMO elements.

This added level of complexity could mean landlords looking for an HMO or MUFB mortgage might struggle to find a lender that can accommodate their specific needs.

How to help

Fortunately, CHL Mortgages for Intermediaries could help. Our larger HMO and MUFB range could be ideal for landlords with more complex properties, and includes 2-year and 5-year fixed products up to 75% loanto-value (LTV) with rates from 4.60% and a choice of fee options.

What’s more, our criteria allows landlords to have up to 10 HMO bedrooms or 10 MUFB units, which could help to further maximise their rental returns.

With landlords constantly looking for new ways to diversify and boost their rental yields, HMOs could offer them a way to achieve returns that can’t be matched by a single let property. By knowing a lender that can help them to meet tenants’ ever-changing needs, they’ll be giving themselves the best chance of taking advantage of new buy-to-let opportunities. ●

HMOs give landlords the peace of mind of knowing that void periods are spread out

RAW Capital Partners Q&A

The Intermediary speaks with Richard Avery Wright and Tim Parkes, founders of RAW Capital Partners, as the firm celebrates nine years and major growth milestones

How did RAW Capital Partners come about? What is the elevator pitch?

Richard Avery Wright (RAW): In early 2015, I approached my bank – a major high street which I had banked with for over 40 years – to try get a mortgage to buy a house in Guernsey. I didn’t have any debt, owned various assets, was a longstanding customer, but my income was nonconventional, so the bank said ‘no’.

Speaking to other individuals, brokers and trusts, I found that many were in the same boat, struggling to access mortgages from mainstream lenders because their financial profiles were not conventional. It dawned on me that if we could replicate the structure of a bank, but without being a bank, that could be one of the answers.

The solution was to create a fund. On the one side, we have borrowers that want loans from the fund to purchase UK residential property, particularly in the buy-to-let (BTL) market. On the other side, we could attract investors seeking better-than-cash returns.

Conveniently, Tim and I were introduced by a mutual contact around the same time. Tim, who has fantastic experience in financial services, had just left a stint as a management consultant, before which he’d help senior leadership roles at Carey Group. So, as the idea took shape, Tim’s knowledge of banking and lending helped make it a reality.

Tim Parkes (TP): On the investor side, our pitch is the safety, security and consistency of our fund. The fund has never produced a negative return since its inception in May 2015; it’s just provided consistent, reliable returns.

On the borrower side, it is our flexibility. We are prepared to say yes when many other lenders would probably say no.

That’s not because we take on riskier loans; it’s because we are more flexible and adopt an approach where we will look at things from a slightly different angle.

What do you like about working with each other?

TP: We’ve got a mutual appreciation of people’s different perspectives and skills. We share a common approach: there is a foundation of trust there, and we honour each other’s word. It is surprisingly rare that people actually do what they say they’re going to do, but we pride ourselves on doing just that.

RAW: Fundamentally, we get things done. Quite simply, we know when there’s something to be done, and we find a way of doing it. We’re overachievers, really, in terms of working hard and making sure we meet our objectives.

What was your biggest challenge?

TP: The early years definitely stand out as having been the most challenging. Once we’d founded the businesses, generating that momentum, achieving the initial growth of the fund, and ultimately, getting that belief and buy-in from people as we were building something new.

RAW: Further to that, raising our profile has been a challenge. We have made good progress in recent years, but we started the firm from fairly humble beginnings. As such, it takes a lot of effort to create awareness of what we do, both on the borrower side and also the investor side. If given our time again, I think we would invest more in marketing and distribution from the start.

TP: Similarly, there are changes we could have made to improve the structure of the fund that, if we did it again, we would likely have introduced more quickly.

What are you most proud of?

RAW: For me, it’s turning a fairly niche idea into a business of scale. We have lent more than £250m

to borrowers in every corner of the globe and grown the fund significantly.

TP: I’d also add the team that we have built around a common commitment to success. We’re all singing from the same hymn sheet, as they say. We have grown the team, but also had buy-in from so many people in terms of what we are trying to build and scale – that is extremely pleasing.

Where do you see RAW Capital Partners in fi ve years?

TP: This one is simple enough – but it’s really to do more of the same. To scale, grow the fund, lend more, and generally be a larger, more successful version of what you see today. The ambition is to continue serving the same client-base – both on the borrower and investor side – but do more of it and continue to deliver an exceptional proposition to both sides.

What would you change about the mortgage industry?

RAW: Property registry could certainly be improved upon. Having something that speeds up applications and redemptions would make everyone’s life easier, and this is where technological advances such as blockchain could play an important role. Further to that, artificial intelligence (AI) and Open Banking could clearly become more integral in automating – and thereby accelerating – processes involved in mortgages and conveyancing.

TP: The mortgage market is, unfortunately, still quite clunky. There are many elements of how mortgages are assessed and delivered that really haven’t changed for 20, 30, even 40 years. There

are still many reports that are time-consuming, paper-based and difficult to get hold of, for instance. I’d find ways to harness technology to smooth out processes and speed up something that is typically taking four months from start to finish down to potentially a few weeks.

What are the pros and cons of running business out of Guernsey?

RAW: It is a safe, secure and generally collegiate business environment. The main drawback, however, is resourcing. Finding good quality people to hire in Guernsey can be complicated.

TP: We’ve got a regulator that’s reasonably easy to approach, for a more open, progressive dialogue. That’s a real positive relative to places like the UK, where it’d be almost impossible for a smaller player to go and have a direct conversation.

Who

are your leader inspirations?

TP: Richard Branson’s always been someone who has inspired me. He’s always tried to take an existing industry and compete in a different way, whether that is by price, service, or typically just try to be different in the way he’s approached customers and built his brands.

I think there are a lot of synergies with that approach that we’ve tried to copy. Ultimately, there’s nothing new about mortgages and there’s nothing new about investment – what we’ve tried to do is approach both of those markets and compete in a slightly different way without reinventing the wheel.

What is a piece of advice you would give to a new founder?

RAW: Perseverance trumps adversity. There’s the saying that ‘it’s a marathon, not a sprint’. Well, starting and running a business is an ultramarathon. There will be ups and downs, and periods when you get knocked about a bit, have sore feet, a sore head, sore ego, sore everything. But you’ve got to dust yourself down and keep going to the finish line.

TP: You have to focus always on what you are trying to do different. To make that happen, you have to surround yourself with people who are good at the things you’re less good at. As a founder, you can’t be good at everything – creating a team with complementary strengths and weaknesses is crucial. ●

RICHARD AVERY WRIGHT ( LEFT ) AND TIM PARKES

Communication key in complex cases

The mortgage market is ge ing more complex, especially for property investors. While complexity is increasing across the board, property investors are facing even greater challenges.

A lot of this comes down to changing priorities among investors. The recent Budget introduced some uncertainty, causing investors to pause their plans. Tax changes have also led some part-time landlords – those with just one or two properties – to rethink their options.

A survey by the National Residential Landlords Association (NRLA) found that 41% of landlords are planning to sell oﬀ at least some of their properties in the next year. But it’s not about qui ing the property market altogether. Instead, many are shi ing their focus.

Traditional buy-to-let (BTL) properties, like the standard twobed terraces, aren’t as a ractive as they used to be. Now, more investors are looking at houses in multiple occupation (HMOs) or semicommercial properties.

These investments are deﬁnitely more complicated to manage, but they also come with bigger potential rewards. Plus, they have a built-in safety net. If one tenant moves out, others are still there to help cover the costs. That kind of stability is really a ractive when you’re crunching the numbers.

Tackling complexity

So, what does ‘complexity’ really mean in practice? Let me share a couple of real-life examples we’ve handled at HTB.

First, there was an investor restructuring a £14m property portfolio. This portfolio included both traditional buy-to-lets and semi-commercial properties, and the investor was moving from a

partnership to a limited company structure. Handling such a transition with just one property is complicated, but doing it with a portfolio this size is on another level.

Then, there’s another case where a client needed to refinance a 43-property portfolio. They’d acquired these properties earlier this year at a good price using a bridging loan, and now it was time to refinance. The goal? Pay off that initial loan and free up funds for future investments. It wasn’t straightforward, but we managed to get it done.

These examples show the kinds of challenges today’s investors face –and why they rely on their brokers for guidance.

Communication is key

So, how do we help investors navigate these complicated situations? It all starts with clear, open communication.

At HTB, we believe that the more information we have upfront, the be er we can support you and your clients. Even the details that might seem minor can be crucial in structuring an eﬀective solution.

That’s why we encourage brokers and clients to share everything from the beginning.

But communication doesn’t stop there. It’s equally important to keep those lines open as the case progresses. Regular updates and collaboration help avoid unnecessary delays and keep everything on track.

We don’t just react, we anticipate, ensuring that solutions are already in place. Direct access to underwriters is just how we operate, allowing us to address any issues promptly and without the need for formal meetings or callbacks.

Unfortunately, some prefer to keep brokers and borrowers at arm’s length, making the process feel more like an uphill ba le than a partnership. We take the opposite approach. We value

ALEX UPTON is managing director of specialist mortgages and bridging at Hampshire Trust Bank

collaboration, because it’s through these open relationships that we can deliver the best outcomes for our clients.

Flexibility matters

Another crucial factor in solving complex cases? Flexibility. Every investor’s situation is unique, which means cookie-cu er solutions just don’t cut it.

Some lenders struggle with this, relying on rigid, off-the-shelf products that force brokers and clients to fit a square peg into a round hole. But bespoke solutions and adaptability make all the difference for investors with more intricate requirements.

Rising to the challenge

The growing complexity in the mortgage market isn’t just a phase –it’s here to stay. This means lenders need to step up their game. A tick-box approach won’t work when most cases are far from black and white. Forcing a one-size-ﬁts-all solution only leads to frustration for investors, who need to deliver properties that meet the diverse needs of renters and buyers.

As an industry, we have to embrace this challenge. We see it as an opportunity to get creative, think outside the box, and deliver personalised solutions that genuinely work for our clients.

For brokers, the key is identifying which lenders are willing to roll up their sleeves and tackle complexity head-on. Those that embrace collaboration and adaptability are best positioned to support investors as the market continues to evolve. ●

Level playing eld for SMEs to boost delivery

Housing provides the backbone to our economy, and with the Government’s ambitious targets to deliver 1.5 million homes, small to medium enterprises (SMEs) will help plug that gap to deliver the high-quality housing and infrastructure this country so desperately needs.

A recent report ‘Get SMEs Building Again’ by Pocket Living, supported by City & Country, notes that the number of SME housebuilders has plummeted from 12,000 in the 1980s to just 2,500 today, with the sector now building just 10% of the UK’s new homes, compared with nearly half of homes in the 1970s.

This was paired with the latest ‘State of Play’ report 2024/25, which noted that 51% of SME home builders had waited over a year to obtain planning permission. Delays in the planning system and under-resourced local authority teams were cited as key issues by 94% and 90% of respondents, respectively.

The statistics speak for themselves. SMEs have a vital role to play, but there are too many barriers in the way – the pace of planning is one such hurdle, but another is the cost of ﬁnance. The clock does not stop, even when the planning and discharge process can be so lengthy and uncertain.

This makes viability and certainty over a scheme extremely challenging, because a scheme that is viable to build and sell can become unviable when faced with uncertainty around when a developer can start to build. This, paired with new building regulations, sustainability requirements and the ﬁnancial landscape for buyers is hindering the industry’s delivery.

SMEs are o en not cash-rich businesses, and therefore the delay costs tend to be more of a barrier to development than for larger businesses, which inhibits their ability to compete with those larger organisations. This is coupled with challenging industry conditions, including the supply of industry professionals, the supply chain of labour, and material challenges.

When was the housebuilding industry last talked up publicly as a fantastic place to build a career? It doesn’t happen o en enough, and yet it so has much to oﬀer for all types of people in our country.

Change is needed

If the Government is serious about its housing delivery, it must ﬁnd a way to incentivise SMEs. While we need to play our part in the solution, we would beneﬁt – and be more impactful – if the environment we are operating in was healthier.

The UK Government has stated that it will ﬁx the planning system. That’s great, but it isn’t ﬁxed yet, and in the interim the delay costs are inhibiting the building of homes.

While we are on the journey of fixing the planning system, the Government should encourage developers to regenerate areas and build the new homes required by looking at offering zero or low-cost finance through Homes England. This would, in turn, reduce the inherent risk of planning delay costs to development and help to make new schemes viable and give us more confidence to take up the opportunity of commi ing our businesses to building more.

Not only this, but it will also increase the speed at which development is unlocked across the

WAYNE DOUGLAS is managing director at City & Country

country, and result in more variety of housing schemes that are delivered.

Consider the empty retail or commercial units across the country – so much space with enormous potential that is going to waste. Space that is no longer ﬁt for purpose can o en harm local towns – seeing old buildings sit there for years without investment can be an eyesore for many residents.

These schemes can be regenerated to create high-quality neighbourhoods, and new development can help to enhance an area, giving potential homeowners a greater choice of new homes and supporting families and young people onto the property ladder.

SMEs can and should be incentivised to develop these empty spaces, provided they have the correct ﬁnancial support and track record to do so, for the greater beneﬁt of society and the economy.

Housing provides spaces in which people can live, work and play, and its contribution to tax revenue is huge.

Converting gives buildings a new lease of life and can help to regenerate an area. This is why the impact that housebuilding has on the overall economy cannot be overlooked.

Not only does it create jobs directly and indirectly through its supply chain, but it also helps support local infrastructure and services, such as well-connected transport links, green spaces and new facilities such as schools and community centres.

The time is now to support SMEs, and with a new pro-housebuilding Government comes a great opportunity to incentivise SMEs to ﬂourish. Now, we can only hope they put actions into words. ●

Experience counts in development nance

One of the things that has always struck me about the development market is that we’re lending today– and asking the valuer to assess something’s worth – using information which is generally nine to 12 months old, against something which will be built in 12 to 18 months.

You have to apply an overarching and long-term view to knowledge of the local market, of the developer that is transacting, why they believe something works, what the saturation of the market looks like, the stability of the market, the geographical pressures of a certain area – the list goes on.

This is where the ﬂexibility of being a non-bank enables us to look at deals which, from a policy perspective, may not ﬁt, until you actually allow yourself to sit down with the all the parties involved and have a broader discussion to create a deal which works.

The experience balance

Experienced clients are important in this market, but how do you balance that with injecting new talent?

Quite o en, the credit appetite in a bank will be for a developer who has completed at least three schemes, for example, whereas we support other borrowers as well.

That might be a contractor who has delivered schemes, but never as the principal borrower. They have the experience of delivery, which is possibly the most critical element, but they haven’t had the experience of actually borrowing.

This is where the broker can come in, providing help to untangle the ‘dark art’ of lending.

The broker has the value of being able to sit down with a borrower and understand what they’re about – they can see the other things that the person has delivered, whether they know the processes and how to deliver the product. They can also understand the details, like whether they’ve secured planning or bought site consent, and go through that journey in order to match the right lender to the borrower.

This is becoming increasingly important in this market, particularly as there are so many small to medium (SME) developers that are no longer here. We are seeing the transition of contractors stepping up to become principal developers, and we need that right now.

That evolution from a being a contractor into being a smaller housebuilder – that’s quite exciting, and it’s where the likes of BLEND step in, supporting those new entrants that haven’t necessarily been through a downturn, aren’t necessarily ‘scarred’ to the same degree a er decades of dealing with the system.

There is certainly an enthusiasm among people wanting to come into the industry, even with the challenges, and we’re very keen to support that, where there’s experience and a good understanding of how the market is evolving. One of my favourite types of borrower is somebody who gets their hands dirty, who is in control of the process.

Lender evolution

The lending market has evolved to have a range, from the bank to the specialist challenger to the non-bank. Non-banks are going through an evolution now as well, as they’ve now found their foothold in the market and they’re starting to look at larger sized

deals. We’ve certainly seen a number of lenders that have increased their appetite to write larger deals.

The market we operate in – £1m to £10m – has almost become a bit more underserved, because of the pressures which are placed on lending institutions to deploy more capital. If the market is not moving very quickly, quite o en a larger deal can be seen as a way of plugging that hole. However, having people like us on the ground that continue to provide a service for those one to 20-unit operations is critical for the market to keep moving.

Having someone that can sit down with and speak to them directly – be it from a credit or a risk perspective – is something you don’t really get in the big banks, or even the big challenger banks, anymore. It will normally go through a credit commi ee, without that hands-on part.

We try to understand what the client is trying to achieve, without losing sight of that once it gets in front of a credit commi ee. When one of the team here is involved in the project, they’re involved from start to ﬁnish.

The relationship means having those conversations about next projects early, looking at where there’s an opportunity to do something a bit more inventive. You might be close to the end of a project, for example, about to release equity, and could follow or bridge it into another scheme.

Being in communication on a regular basis is key to unlocking those opportunities. This is also true if there are more diﬃcult conversations – as there o en will be with the market as it is. Developers want a lender that is able to have an honest conversation ●

YANN MURCIANO is CEO at BLEND

Advertise with The Intermediary and reach 12,000 current and next-generation property nance business leaders. With commercial opportunities spanning print, digital and events, e Intermediary has a multitude of creative channels that can deliver your marketing message to the people that matter. Contact Stephen Watson on STEPHEN @ THEINTERMEDIARY.CO.UK to discuss how e Intermediary can help your business achieve its goals. Want to share your message with the industry? theintermediary.co.uk

2024

A yeAr in review

SUCCESSES, SETBACKS, AND THE ROAD AHEAD

Jessica O’Connor

2024 has been a rollercoaster for homeowners, prospective buyers, and landlords alike – leaving many clutching their budgets and bracing for an unexpected drop.

The year kicked off with a bang – or rather, a lender rate war – as banks and building societies scrambled to outdo one another with competitive deals. Borrowers briefly basked in a sea of enticing rates, only for the Spring Budget to deliver a sobering dose of reality.

Then-Chancellor Jeremy Hunt’s fiscal plan left mortgage holders and aspiring homeowners out in the cold, with little to no support for those navigating rising costs.

Amid this turbulence, politics entered the fray. Labour’s promise of 1.5 million new homes this Parliamentary term set the General Election stakes sky-high, although many continue to question whether hammer will ever meet nail.

Just as summer arrived, cooler winds blew in from the Bank of England in the form of its first interest rate cut since 2020 – a small but significant glimmer of relief for borrowers.

Yet, as the Autumn Budget rolled around, dreams of a softer landing faded.

Landlords and first-time buyers found themselves, yet again, without significant support – a recurring theme in a year where policy ambitions often felt detached from housing market realities.

Still, as The Intermediary reflects on the highs, lows, and occasional moments of relief, one thing is clear: for better or worse, the property market remains the nation’s most captivating drama.

January rate war

The so-called ‘rate war’ of January 2024 was a much-needed reprieve for the market, bringing rates below the elusive 4% threshold and setting the stage for a fiercely competitive start to the year.

This early momentum was driven by a dramatic fall in swap rates at the close of 2023, which allowed lenders to tap into ‘cheap’ money and translate those savings into a flurry of product rate cuts.

Sebastian Murphy, group director at JLM Mortgage Services, says: “It’s interesting to consider the ‘rate war’ of January 2024, because it actually started in December.”

Borrowers benefitted from a window of affordability, with sub-4% 5-year fixed deals leading the charge.

Mark Harris, chief executive of SPF Private Clients, remembers that the “holy grail” of sub4% 5-year fixed-rate mortgages came “thick and fast,” as HSBC launched a 3.94% 5-year on 4th January, following Halifax’s reductions of up to 0.83% only two days previously.

Even 10-year fixed deals dipped below 4%, with First Direct and HSBC both offering long-term options at 3.99%. Competition was fierce, with lenders jockeying for position at the top.

As Nicholas Mendes, mortgage technical manager and head of marketing at John Charcol, explains: “It was almost as though they were daring each other to go lower.”

This was exemplified by Co-op Bank unseating HSBC with a 3.84% deal just a day after the latter made headlines with its 3.94% offer.

For a housing market grappling with affordability challenges, the Spring Budget offered little in the way of meaningful support, and commentators bemoaned the lack of policies to address the need for extra housing stock and support for first-time buyers.

Describing it as a “failed opportunity,”

Emerson says that the Spring Budget ultimately failed to address the pressing issues plaguing the sector.

“Both the Spring and Autumn Budgets were failed opportunities in general to revitalise the housing sector,” he adds, noting that more proactive measures are still needed to stabilise supply and demand.

Intermediary.

Emerson cites the forthcoming Planning and Infrastructure Bill as a potential lifeline, emphasising its role in delivering the new homes the UK so desperately needs.

General Election

However, the rapid pace of rate adjustments presented challenges for brokers. Murphy acknowledges the operational headaches caused by this constant repricing: “Getting the best deal for the client is the be all and end all. That work and the regular appraisal of price shifts is an essential part of the work.

Deafening silence

“It would be nice to think that lenders valued this work, the regulatory risk we take, the business we provide, by giving proc fee parity should the recommendation still end up with the existing lender and a product transfer.”

Spring Budget

By March, Hunt’s Spring Budget landed, leaving many in the industry underwhelmed.

While there were notable changes, such as scrapping tax breaks for furnished holiday lets and tweaks to rules around multiple dwellings relief, these measures felt like more of a ripple than a wave.

Mendes says: “Although these shifts won’t officially take effect until 2025, they were enough to stir the pot.

“Conversations with clients were dominated by what these changes might mean in the future, particularly for landlords and investors.”

The Conservative Government’s inaction in the Spring Budget was one of the factors that culminated in a resounding defeat during the July General Election, ushering in a new Labour Government with a mandate for change.

Former Prime

Minister Rishi Sunak’s rain-soaked campaign announcement set the tone for a lacklustre Conservative effort, which, as Murphy puts it, was “never going to be looked at fondly” by an electorate still reeling from “14 years of abject chaos.”

Labour’s housing policy promises were central to its victory, resonating with voters who had grown weary of stagnant markets and unaffordable homes.

Among the headline commitments was the ambition to build 1.5 million homes during this Parliamentary term, a pledge that Martese Carton, distribution director at Leeds Building Society, says could “have a hugely positive impact on the mortgage industry.”

Chancellor Rachel Reeves went on to reinforce this election commitment when she allocated £5bn for development and an increase in funding for the Affordable Homes Programme during Labour’s first Budget statement.

SWIFT ACTION COULD MEAN A MORE BALANCED MARKET

Nick Hale, chief executive officer at Movera

The General Election marked a pivotal moment for the UK housing market. Labour’s ambitious housing agenda, particularly its focus on a ordable homes and public housing projects, signals a promising shift in addressing longstanding challenges. However, as we’ve seen with the recent Budget, the road ahead is complex, with the pressures of in ation, rising energy costs, and uctuating interest rates adding layers of uncertainty for households and businesses alike.

With in ation (CPIH) climbing to 3.2%, a ordability continues to be a signi cant concern. For rst-time buyers and those facing remortgage deadlines, the lack of immediate relief measures, like extending the First Time Buyers’ Relief threshold or introducing replacement schemes for Help to Buy, has left gaps that need addressing.

Despite these challenges, opportunities exist if the Government and industry work collaboratively. Policy stability and a focus on targeted a ordability measures are essential to ensure the market grows sustainably.

As we look ahead, in ation may stabilise if energy costs remain contained, but signi cant interest rate cuts seem unlikely before early 2025. The housing market will need to brace for a period of adjustment, with a ordability and accessibility remaining at the forefront of discussions.

Labour’s housing policies, if implemented e ectively, could lay the groundwork for a more balanced and inclusive market. However, without swift action to bridge the a ordability gap, we may see prolonged stagnation before meaningful recovery.

“I feel positive that we are slowly moving in the right direction to help put homeownership within reach of more people,” Carton adds.

Labour’s agenda also includes significant legislative reforms. The proposed Planning and Infrastructure Bill aims to streamline the development process and empower local authorities to meet ambitious housing targets.

Meanwhile, the Renters’ Rights Bill promises sweeping changes to the private rental sector (PRS), giving tenants the right to combat damp and mould and even to keep pets.

Emerson describes the Renters’ Rights Bill as “the biggest piece of legislation to hit the private rental sector in over three decades,” though he warns of challenges ahead.

Calling for adequate resourcing to ensure fair implementation, he says: “Many of our members are worried about certain areas of the proposed legislation, and the impact this will have throughout the sector with the existing lack of enforcement by local authorities.”

While Labour’s victory generated optimism, questions remain about whether its ambitious targets will materialise, or if bureaucratic hurdles will slow progress.

As Murphy notes: “Whether the Labour Party has really learned anything from this tragicomedy of how not to run a country remains to be seen.”

Consumer Duty

Late July brought a significant milestone for the financial services industry, with the final Financial Conduct Authority (FCA) Consumer Duty deadline, a regulation that has reshaped how lenders operate and prioritise customer outcomes. For many in the industry, this marked a turning point.

Mendes says: “This new regulation meant lenders had to step up and put customers first –no cutting corners.

“From a professional perspective, it felt like a step in the right direction, even if it meant more compliance work for us.”

The full implementation of Consumer Duty included requirements for closed products and services, ensuring no area of financial services was exempt.

Andrew Gething, founder and managing director at MorganAsh, notes: “It’s fair to say that Consumer Duty continues to receive a mixed response.” Indeed, while some firms have embraced the regulation, leveraging it to enhance their competitive edge and better serve vulnerable customers, others remain complacent.

“A key example is how firms identify and monitor vulnerable customers,” Gething adds.

“The FCA is still seeing examples of firms reporting few or even zero vulnerable customers, which just isn’t possible.”

Enforcement has been robust, with fines levied against VW Financial Services and TSB for failings related to vulnerability.

Gething adds: “Not only are we then more aware of who our customers are and the challenges they face, we are better placed to adapt and personalise our service, and to provide the necessary reporting required by the regulator.”

Looking ahead, the cultural shift required by Consumer Duty remains a work in progress.

Intermediary.

He says: “The mortgage industry is on the cusp of much-needed transformation. After a prolonged period of limited progress, fresh innovations and new offerings are poised to drive meaningful change.”

Richard Pike, chief sales and marketing officer at Phoebus Software Ltd, says: “Outcome-based compliance is the focus, rather than prescriptive compliance-led outcomes.”

He also cites the need for organisations to embrace this approach as part of a broader transformation, adding: “Consumer Duty continues to be a big focus into 2025 […] this will require a large-scale culture change in many organisations.”

Adopting technology

This year, the mortgage market witnessed a surge in the use of technology, particularly artificial intelligence (AI), which is steadily transforming the industry.

Mendes says: “This year also marked the mainstream introduction of AI into brokerages, sparking discussions about how this powerful tool could be used effectively.”

From automating compliance checks to conducting initial affordability assessments and managing customer interactions, AI has streamlined operations across the board. Its potential to revolutionise the mortgage journey by delivering speed, precision, and personalisation – while maintaining a human touch – is becoming increasingly clear.

Andrew Lloyd, CEO of Fignum, notes that 2025 could be a breakthrough year for both the mortgage and fintech sectors, as fresh innovations reinvigorate the market.

Key among these developments has been the commitment of legacy banks like HSBC, NatWest, and Lloyds Banking Group to the Open Property Data Association (OPDA). This is expected to improve data accessibility, making property transactions more transparent and seamless.

Lloyd also highlights the consolidation trend within fintech, where larger firms have absorbed smaller ones to unlock new opportunities.

MORTGAGE EX MACHINA

“After the innovation boom of 2023, punctuated by developments in AI, the industry has seen a surge of consolidation,” he explains, positioning 2025 as a pivotal year.

Inflation and interest rates

Throughout 2024, the Bank Base Rate (BBR) and inflation trends painted a nuanced picture for borrowers and advisers alike.

Inflation fell steadily throughout the year, dropping from 4% in January to 2.3% by November – a shift that helped stabilise financial markets. This easing allowed the central bank to cut the BBR from its 16-year high of 5.25% in January to 4.75% by November, signalling the beginning of a more borrower-friendly rate environment.

As Graham Sellar, head of intermediary channel at Santander, explains: “There was some relief for borrowers this year in terms of the Bank of England base rate.

“With the base rate now standing at 4.75%, down from the high of 5.25% and with further reductions predicted, many lenders have been able to lower their follow-on rates, allowing them to increase how much an applicant can borrow.”

However, mortgage rates did not align neatly with the downward trend in BBR.

Kate Davies, executive director at Intermediary Mortgage Lenders Association (IMLA), highlights this disconnect. She says: “While lenders’ variable rates have fallen during 2024, the fixed rates

AFFORDABILITY REMAINS A CHALLENGE

charles roe, director of mortgages at uk finance

Although the final interest rate decision of the year is on 19th December, nancial markets’ expectations of a pre-Christmas cut appear to be receding.

Mortgage a ordability remains a challenge, meaning activity is very sensitive to changes in product pricing. Our latest Household Finance Review highlighted that mortgage lending grew in Q2 and Q3 of 2024, with the number of completions increasing by 15% year-on-year in Q3.

In our October pre-Budget submission to HM Treasury, we requested that Government maintain the increased threshold at which rst-time buyers pay Stamp Duty, arguing that this would help with a ordability. The Government decided against it, and this could see more buyers looking to complete purchases before the deadline.

Given that the UK has a signi cant shortfall of homes, we welcomed the Budget commitment to increase the supply of new housing, alongside providing more support to help green the UK’s housing stock. These are both important long-term issues that should bene t the whole of the housing sector, and are two of the key recommendations of our ‘Homes We Need’ report, published in September.

Finally, it is encouraging to see how resilient mortgage borrowers have been in keeping up to date with their payments. In Q3 arrears fell to 106,600 cases (1.08% of all homeowner mortgages outstanding), with signs that numbers may fall for the rest of the year.

which are preferred by the vast majority of borrowers are dictated by swap rates.

“Swaps are based on market expectations of future interest rate movements, rather than BBR.”

This divergence meant that while the cheapest fixed rates dropped below 4% in autumn following the rate cut, they climbed again after the autumn Budget unsettled market confidence.

This dynamic has presented challenges for mortgage advisers tasked with managing client expectations.

As Davies points out: “It is a scene we may well see play out again during the course of 2025,” with refinancing outcomes hinging on both timing and broader economic conditions.

Even so, the overarching trend has been one of cautious optimism and stability.

David Hollingworth, associate director,

Intermediary. The

communications at L&C Mortgages, says: “There should still be more positive moves in interest rates for borrowers as we head into the new year, as long as there are no other surprises along the way.

“That should help to build consumer confidence and hopefully drive more activity in the housing market.”

Raphael Benggio, head of lending – bridging finance at MT Finance, says: “The recent downward trajectory of funding rates, influenced by the Bank of England’s base rate cuts, has brought a breath of fresh air to the bridging finance market.”

With not only residential but specialist areas of lending benefitting from lower rates, Benggio notes that “stability breeds opportunity,” setting the stage for a more predictable and thriving financial landscape in 2025.

Autumn Budget

On 31st October, the Autumn Budget delivered a mixed bag for the housing market, with many in the industry criticising its lack of bold action to address key issues.

As Hollingworth notes, while some feared a hike in Capital Gains Tax (CGT) for property sales, the announcement instead brought a significant blow to landlords, increasing the Stamp Duty Land Tax (SDLT) surcharge on additional properties from 3% to 5%.

“That spells another blow for a beleaguered buy-to-let [BTL] market, and is only likely to further the professionalisation of the market,” Hollingworth observes.

The complex world of specialist SME finance

NAVIGATING THE MAZE

Further challenges emerged as, despite rumours, there was no Stamp Duty threshold extension, despite widespread predictions in advance of the announcement, with changes still set to take effect in April 2025.

Sellar says that this change “is likely to trigger a rush to complete deals before April,” adding yet another layer of complexity to an already strained market.

This policy shift may increase short-term activity, but offers little in terms of long-term stability or affordability for aspiring homeowners.

With first-time buyers, in particular, feeling left behind, Karl Wilkinson, CEO of Access Financial Services, describes widespread frustration with the lack of solutions addressing the barriers to homeownership.

“Not everyone can rely on the ‘Bank of Family’,” he adds. “There’s a big gap in the market in 2025 for a zero-deposit mortgage solution for firsttime buyers.”

On the broader housing market front, the £3bn investment aimed at boosting new home construction was a step in the right direction, but one widely viewed as insufficient to meet the scale of the housing crisis.

Matt Harrison, commercial director of finova Payment Mortgage Services, says: “With fewer than 200,000 homes built last year, we are still far short of the 300,000 annual targets needed to address the housing crisis.”

Harrison warns of the need for streamlined planning approvals, incentives for small and medium sized (SME) builders, and targeted support for the rental market to achieve meaningful progress.

Looking ahead

The turbulence of 2024, marked by economic and political upheavals, left its mark. However, there are encouraging signs of stability and resilience ahead.

Pike describes 2024 as “tough and consolidatory,” with the market struggling to find its footing in the first half of the year.

However, he notes: “With more certainty in place in the second half of the year, market sentiment is much more positive, and the industry is looking forward to a continuing uplift as we move into 2025.”

Hiten Ganatra, managing director of Visionary Finance and Mortimer Street Capital, notes that stability is essential for fostering confidence in the housing market – something that has been noticeably absent this year.

He says: “To build confidence in the UK housing market, a degree of stability and confidence is always needed […] the market

LEAPS AND BOUNDS IN LATER LIFE

Leon Diamond, CEO of LiveMore

Despite the oscillations in swap rates, particularly at the beginning of 2024, it was a very productive year for later life lending. The market experienced sustained quarterly growth in residential loans, with an increase of some £900,000 in value between Q1 to Q3.

I expect Q4 gures to continue this upward trajectory, now that economic and political questions have been answered and the industry continues to work towards providing more and better nancial options for people aged 50 to 90-plus so they can achieve their life goals.

Over the course of 2024, I think that the seeds of understanding really started taking hold, and that later life is becoming more mainstream due to our ageing demographic and changes to social structures.

Later life no longer refers to a single product – equity release –but to a person who happens to be in their 50s, 60s or even 90s and might be better suited to a retirement interest-only (RIO), a standard interest-only mortgage or even a capital-and-interest mortgage, depending on their income.

The later life market remains a highly underserved and massively growing market, with £200bn in interest-only mortgages set to expire over the next 10 years and the ‘Bank of Family’ projected to be worth £10bn by 2025 from a record £8.1bn in 2023.

Technology continued to be a key driver to support this market in 2024, particularly as product choices continue to widen and the whole later life lending landscape is becoming increasingly complex for brokers to manage.

has once again shown amazing resilience with lenders wanting to lend and borrowers increasingly wanting to borrow.”

While the geopolitical and economic landscapes remain uncertain, the signs of a stabilising market, coupled with the resilience of its key players, suggest a brighter path forward. With continued innovation and a focus on addressing long-term challenges, 2025 holds the potential for renewed growth and opportunity in the housing sector.

As put by Ganatra: “2025 will be more of the same – while there are many worldwide unknowns, opportunities exist for borrowers, and we have many lenders keen to lend, with more due to launch.” ●

Great things still to come in second charge

It’s been a great year for the second charge mortgage market. Business is booming, demand for the product has reached record levels, and we are heading towards the new year conﬁdent that this trend looks set to continue.

Lending in the sector grew 17% year-on-year in the ﬁrst half of 2024, recent research from Pepper Money has shown, with homeowners accessing £804m through second charge borrowing. This was 10-times the £76m seen in the buy-to-let (BTL) market over the same timeframe, and the fastest growth rate seen in any segment of the mortgage market.

As a specialist broker familiar with this area of the mortgage market, these ﬁgures are unsurprising.

Demand for second charge mortgages has been on an upward trajectory since the Covid-19 pandemic, which was followed by tighter lending criteria, rising interest rates and increased economic uncertainty.

In fact, Pepper’s ﬁgures show that the number of second charge mortgages taken out in the four years since the pandemic is up 27% on prepandemic levels, as more brokers and their customers begin to tap into this ﬂexible and versatile borrowing tool.

This is great news for the second charge market, which has surged on the back of rising living costs and higher interest rates, as customers have become increasingly savvy about the ﬁnancial ﬁrepower they hold in their homes.

Brokers, too, have become more conﬁdent in recommending second charge mortgages in situations from which they may have previously shied away.

Second thoughts

With interest rates now starting to fall and the economy beginning to look a li le more stable, it is only natural to wonder whether demand in the sector will begin to tail oﬀ as consumers revert to remortgaging, or other forms of borrowing such as personal loans or credit cards, to address their capital raising needs.

While this is certainly a possibility, the increased awareness and understanding of the second charge mortgage market among both borrowers and brokers means Norton Brokers Services is conﬁdent that the sector will remain buoyant and in high demand as we head into 2025.

Nevertheless, it’s essential that those working in the specialist lending market do not rest on our laurels, and that we keep banging the drum when it comes to highlighting the beneﬁts of using a second charge mortgage as a capital raising tool.

In this new Consumer Duty environment, there is even more onus on ensuring our clients are duly

JIMMY ALLEN is broker account manager at

informed about all their borrowing options, including second charge mortgages, if we are to ensure they are receiving fair value.

There are still many homeowners unaware of how a second charge mortgage works and what it can offer them; many others remain unaware that the product even exists. Raising the possibility of a second charge and how it could benefit these clients could result in a greater number of borrowers using the product to help them achieve their financial goals.

Whether this is to consolidate debt, carry out home renovations, pay a tax bill or even help another family member buy a home, a second charge mortgage is always worth considering in those situations where capital raising is required.

Tap into potential

As we hurtle towards the end of another year and into the next, it is worth reflecting on the fact that –despite the sector’s substantial growth – the second charge mortgage market still offers a wealth of untapped potential to those willing to explore what it has to offer.

Rates have become increasingly competitive, while new lenders have entered the market and many more are poised to do so in 2025. All this points to the fact that second charge mortgages are steadily coming into their own, a trend we expect to continue as we head into the new year, and for many more years to come. ●

Norton Broker Services

Seconds are steadily coming into their own

The best lead generator for 2025 and beyond

On the face of it, the immediate future for the property market is not looking so rosy. UK plc is also not in a good place economically as we approach 2025. There are plenty of media pundits who might disagree with me, and continue to put out messages of positivity, which is ﬁne and helps keep up morale. However, they fail to address the impact of the multiple elephants in the room stomping around to gain our a ention.

Increases in Stamp Duty, employers’ National Insurance (NI) payments, and other new tax raising schemes – while we are still living with cost-of-living pressures – are counterproductive at best, and may well cause the property market to stall further in 2025.

So, what can enterprising advisers do when faced with a potential blackhole of opportunities next year? Logically, the answer is to look for a new business stream that can yield great results. Of course, when I talk to adviser groups, naturally I focus on the second charge market, which is still not being fully exploited by the adviser community.

New business

An adviser’s biggest asset – and one that many still tend to ignore, particularly when times are good – is their existing customers. The lure of new business can tend to divert us from maintaining regular contact. It is my contention that we should take every opportunity to stay in touch, and now that we are living in the age of Consumer Duty, there has never been a be er incentive to create a regular catch-up routine with clients. But we shouldn’t need to be

told to look a er our existing clients. Not only are they a relatively untapped source of potential business, but with the increase in competing services aimed at your clients, none of us can rely on inertia and the assumption that they will still be there when we actually get around to talking to them. Expecting customers to pick up the phone to us a er what might be a year or more since helping them with a mortgage or similar issue is not going to work in today’s competitive environment.

Fostering loyalty

Being proactive and following up on existing customers on a regular basis achieves two things. Cu ing down the possibility they might choose another avenue rather than their existing adviser for product and advice support, and giving the intermediary a readymade potential source of new leads.

While many of us may consider our existing customers to be automatically loyal, the reality is very diﬀerent. Customers are not prepared to wait for us to tell them when they are eligible for a be er deal, and are generally very quick to reach for their smartphones to see what is out there. It is not just the high street retailer ﬁnding that customer loyalty is migrating to the internet – mortgage brokers are not immune.

If you are not interested in your customer base, someone else will be. However, rather than another nail in the coﬃn, this should be interpreted as a wake-up call to look a er existing customers and make time to ensure that they are kept up to date with what is going on in the market, and that you have their interests front of mind.

Doing regular customer reviews will throw out opportunities to ﬁnd

LAURA THOMAS is regional sales manager at Equi nance

So, what can enterprising advisers do when faced with a potential blackhole of opportunities next year? Logically, the answer is to look for a new business stream that can yield great results”

out whether clients are thinking about moving home or staying put. One of the areas that I concentrate on when I am talking to brokers is how they can use second charge mortgages as a means to quickly and eﬃciently access funds to update, renovate or extend their properties.

Last month, I talked about this growing trend. The opportunity to be in at the start of their search for the right kind of finance to put in that new kitchen or bathroom or fund an extension means that you will be able not only to offer balanced advice as to whether a remortgage or second charge suits them be er, but be the agent that arranges the finance. Proactivity with existing clients can be your lead generator for next year. ●

Pure Panel Management Q&A

The Intermediary speaks with James Gillam, managing director at Pure Panel Management, about the 2025 outlook

What has been your experience over the past 12 months?

It’s been a really good year for us and the wider specialist lending market. ere has been doubledigit growth for most of the lenders that we work with, and Pure Panel Management has also seen a 15% to 20% increase in its business, which has been fantastic.

We have also managed to add a number of new valuers to the panel, with eight new companies joining this year. is has really helped to increase our availability to brokers and lenders, strengthening our national coverage.

We have also increased the headcount in our head o ce, adding several new sta members to the business, with no leavers. e new team members have tted in perfectly with the existing team, which has helped stimulate real growth across the company.

Of course, there are always challenges and things don’t always run smoothly, but overall 2024 has been a very positive year.

which has boosted demand for specialist lending. Additionally, more people seeking to consolidate debt have turned to second charge lending instead of moving their rst charge mortgage to a higher remortgage rate. is trend has also helped drive growth in the market.

What does 2025 hold for Pure as a business?

2025 is looking really exciting, backed by a more stable political and economic backdrop. With no major elections looming and anticipated pauses in interest rate hikes, con dence among borrowers and lenders is growing.

What has driven the positive growth seen by Pure – and the wider specialist market – in 2024?

I think any broker or lender operating in this sector will agree that there has been a solid upturn in the market over the last six months. is growth has been driven by pent-up demand from the back end of last year into this year.

2023 was quite a volatile year, with high in ation and frequent base rate rises. is caused many people to delay their plans to move home or build an extension.

Once rates stabilised and the market began to settle, people could better understand the gures and know what they would be paying in interest.

As a result, many have resumed plans, such as building an extension or improving their property,

JAMES GILLAM

We have a couple of new lenders joining us at the very end of this year or early next year, which will further cement our continued growth. We also have three new valuation rms that the business will start working with in December. ese will be fully operational by January.

In terms of the specialist lending market, I think we’ll see continued growth, assuming no signi cant external factors create volatility and uncertainty. Of course, developments in Ukraine and the Middle East could impact in ation, but if stability continues, I hope that next year will bring sustained growth.

I also expect house prices to rise, provided uncertainty is kept to a minimum. I think once people understand what they will be paying and know that there won’t be any shocks, they will be more likely to borrow, and I believe many lenders are eager to lend.

What

do you

think 2025 holds for the valuation market?

e past few years haven’t seen major increases in house prices, and growth has been relatively stable. However, in recent months, interest has returned to rst charge lending, with people

Partnerships

are crucial in the mortgage industry and the valuation market is no di erent. We put a premium on building long-lasting relationships with lenders and brokers alike and strive to ensure we can support advisers if and when issues arise”

regaining the con dence to borrow or build extensions, knowing that they will likely get their money back.

is trend is positive, as there is nothing worse for a valuer than a market that suddenly drops or rates rise sharply. Valuers rely on comparable sales, so a busy but stable market is ideal. If property prices remain steady and grow gradually, it builds con dence among valuers.

We saw some declining valuations at the end of 2023 and early 2024, but prices are now rising in most UK postcodes.

e price index shows a steady growth rate of about 2.6% year-on-year, which is precisely what you want in the valuation market.

What

key trends are we likely to see in the mortgage and housing market in 2025?

I believe there’s still a lot of pent-up demand for specialist lending products that will drive further growth in 2025.

e bridging market has grown signi cantly over the last few years, and while there are reports of a dwindling buy-to-let (BTL) market, we continue to see high demand from specialist BTL landlords investing in properties to convert into houses in multiple occupation (HMOs). We also anticipate an increase in property refurbishments, with the potential for long-term gains.

e second charge mortgage market has also grown rapidly, with new entrants joining this year and several more expected in 2025. is increase in competition will provide more options for clients, improving service and choice for borrowers.

We’re also involved in the equity release sector, which took a hit during the in ation and base rate hikes. However, we’re seeing a resurgence as more customers return with growing con dence. With more lenders entering the market and brokers increasingly looking to the specialist sector, 2025 should be a great year for specialist lending.

Pure recently won Best Industry Partner for 2024 at the National Mortgage Awards – Second Charge. How does it feel?

Winning Best Industry Partner means a huge amount to the business, as second charge mortgages represent a huge part of our business.

We pride ourselves on delivering a top-tier service for our clients, and we work with an extensive network of professional surveyors to ensure the valuation process is conducted e ciently and e ectively.

Partnerships are crucial in the mortgage industry and the valuation market is no di erent. We put a premium on building long-lasting relationships with lenders and brokers alike, and strive to ensure we can support advisers if and when issues arise. Not only does this help to set us apart from other panel managers, it also means we can deliver a more comprehensive and e cient service. is award is recognition that we are achieving those goals, and that is a fantastic feeling.

What does the year ahead look like for the second charge market, speci cally?

Next year, I expect the heightened growth we have seen in the second charge sector in 2024 to continue as awareness of the product among brokers and customers continues to increase.

Following some new entrants into the second charge market this year, I expect more new lenders to enter the sector, bringing with them innovative products and exible solutions to meet the evolving needs of borrowers. is will provide greater choice for borrowers and access to a broader range of capital raising solutions for brokers.

It will also help to drive up competition in the industry, raise awareness and knowledge of the market, and bring second charge to the forefront of mortgage lending and into the mainstream. ●

Tis the season ...but also protected!

As the holiday season approaches, it’s an essential time for homeowners to review their home insurance coverage. There is more activity in the home with guests visiting and parties, extra contents and valuable gi s suddenly added to the house, and – even if temporarily – ﬂammable decorations all around the home. On top of that, the weather is naturally colder and more extreme. These are all factors which impact the protection that may be needed.

Consumers must be advised or made aware that, during times of holiday season such as Christmas, there are excellent quality home insurance policies out there in the market oﬀering automatic increased contents coverage and protection.

However, not all policies oﬀer this extra cover, so consumers should check to see what extras they have available to them.

At Safe & Secure Home Insurance, the policies oﬀered through our intermediaries and insurers all help at this time of year.

Festive additions

As we head towards Christmas and New Year, many people bring new expensive electronics, jewellery, and other valuable gi s into their homes, which can raise the total value of contents. It is always good practice to check whether a current policy has suﬃcient coverage for any high-value items being stored in your home.

Not only this, but it may also be necessary to add special endorsements or identify high value individual items for full protection.

We all know that the highlight of December is o en when we decorate

Examples of the cover available, and the associated wording regarding extra cover during celebrations or seasonal events:

In the 30 days run up to you or your family’s wedding, civil partnership ceremony, birthday or religious festival, we’ll automatically increase the maximum claim limit of cover on your policy. During this period, we’ll cover the gifts if they’re lost, stolen or damaged, as long as they’re either in your home, at the venue where the event is being held, or being transported between the two.

For weddings, birthdays and religious festivals the sum insured shown in the policy schedule for contents in the home will be automatically increased by £5,000 to cover wedding, birthday, or other gifts: i) during the month of any religious festival or celebration that you celebrate, ii) for 30 days, before and after the day of your wedding or civil partnership, iii) for 7 days after family birthdays.

Special events…we will automatically increase the contents sum insured by up to £7,500 for any one claim for gifts, food and provisions during the period 30 days before and 30 days after a special event you or your family are celebrating, for example: weddings, civil partnerships, religious festivals, birthdays, anniversaries and any other type of celebration

the house inside and out. However, from a home insurance perspective there are risks associated here.

Christmas trees, candles, and string lights can pose ﬁre risks. Homeowners and tenants must ensure their policy covers accidental ﬁre damage.

Not to be like The Grinch, but this is also a prime time of year for burglaries to occur, as thieves know that there is a much greater chance of nearly all homes having lovely gi s around the tree and in the home. Statistically, the holiday season sees an increase of 21% of burglaries in the UK due to the increase of visible valuable items, so a home insurance policy must include the coverage and ensure that the limits are suﬃcient.

On a lighter note, it’s lovely to have friends and family round at Christmas, but of course, if hosting parties, there’s a risk of injury for guests. To stay fully covered and insured, homeowners should check they have enough liability coverage in case someone gets hurt on their property. Also, if a guest accidentally damages something in the home or causes harm to themselves, you would want to know that your policy covers it.

White Christmas

Finally, many of us have seen snowfall in our area in recent weeks. It is crucial that action is taken to prevent issues such as frozen pipes when temperatures drop, especially for those who are away from their homes on holiday, or visiting family or friends. So, we would advise homeowners to check if a policy covers water damage from burst pipes, and to take precautions, like keeping the thermostat set at a minimum temperature and insulating exposed pipes. Not only this, but snow build-

to be jolly...

STEPHANIE DUNKLEY is development director at Safe&Secure

up on the roof can lead to damage, while ice on driveways or sidewalks poses slip risks. Make sure your policy covers winter weather damage and liability coverage if someone slips on the property.

If we advise our customers to take a proactive approach to their home insurance ahead of the holidays, we can help keep their home safe and secure, and if the worst happens they will at least have the best home insurance cover possible to react and support at this time.

If any of your clients are unsure about their coverage, a quick review with a broker like ourselves can help clarify their protection and identify any potential gaps.

So, please do use this time of year to revisit your client’s general insurance to ensure a properly festive season! ●

Why referral was the hottest trend of 2024

Arguably one of the biggest trends of 2024 in the general insurance (GI) intermediary market has been the rise in referring. The concept is, of course, not new, but it has seen signiﬁcant traction this year due to developments that make it easier for advisers to manage their referral business, and deliver a be er customer experience that builds trust.

We’ve seen demand from advisers for our referral services grow throughout 2024. The last full quarter (Q3) saw us hit record levels for new business – up a huge 25% on Q2 –and we’re on track to maintain that growth in Q4.

There’s also a strong appetite from mortgage customer relationship management (CRM) providers to integrate referral services into their own platforms. More partners are opting to pass customer data already captured during the mortgage process into our journey – creating a seamless experience, enhancing advisers’ relationships with customers, and helping them realise the value from selling GI.

The results of our 2024 Adviser Survey suggested that the growing popularity of referral services may be a contributing factor in helping advisers to cut down on missed GI opportunities – as, for the ﬁrst time, fewer than half of advisers told us they sometimes miss out.

It’s good news for homeowners too, as the end outcome is that more of them have good protection and greater peace of mind. For us, it takes us one step closer to our ambition of making sure every home is fully protected.

So, what’s driving the trend? Partly, this is down to the regulatory

and economic backdrop advisers are operating in. The impact of the Consumer Duty cannot be understated here.

Now that advisers know what their obligations are under the duty, it has undoubtedly encouraged more of them to initiate the GI conversation with every single customer.

In what has been another incredibly busy year, referring is a great option for time-stretched advisers who might not be able to have that conversation themselves, but want to make sure clients are still being looked a er.

Con dent decisions

Andrew Dunn, an adviser at Q Financial Services (part of The Openwork Partnership), spoke about his ﬁrm’s experiences using our referral services: “Previously, we managed GI sales in-house but this created a huge additional workload on the member of our team responsible for discussing GI, and meant that they were sometimes unable to deliver the service they wanted to for every customer. I think what’s most valuable for me is the greater accessibility it oﬀers both our team of advisers and the client. We’re by no means experts in buildings and contents insurance, so having the option to refer our clients onto subject ma er experts gives everyone involved some peace of mind and assurance.”

We’re also all aware that the wider economy has put greater pressure on insurance costs, and in many cases, driven up premiums. Increasingly, advisers might be referring the GI conversation simply because they lack the conﬁdence to broach it themselves. We are well placed to handle questions or objections about price from clients, ensuring they still make an informed decision.

GREEN is director of distribution at Paymentshield

In addition, it also must be acknowledged that enhancing our referral proposition is all about empowering our partners. In large part, the popularity of referral can be a ributed to greater ﬂexibility and visibility – something that we’ve worked hard to ensure is embedded in our technology.

This flexibility comes in both how referral is utilised by advisers and in the choice it affords clients. Advisers can refer their clients to us to have an advised conversation – with flexible times for clients to choose when to receive the call – or, for those customers who just want a slick user experience with no discussion, advisers can trigger an online journey which will send the client an indicative quote via text or email. Visibility is another key driver. We know both anecdotally and from research with advisers that, historically, a blocker to utilising referral services has been the loss of control. Losing sight of where the customer is in the home insurance journey doesn’t sit well with the standard of care advisers provide, and compromises the relationships they’ve worked hard to build. We built a referral interface that provides instant oversight on all communications with the client, as well as the current status of an application.

All of this means that, in 2024, we’re ﬁrmly in a place where advisers feel comfortable that referring GI doesn’t compromise on the very thing they pride themselves on: ﬁrst-rate customer experience. With that, we expect the referral trajectory to continue into 2025. ●

EMMA

Renters’ Rights: How does insurance keep up?

Introduced on 11th September 2024, the Renters’ Rights Bill aims to overhaul the private rental sector (PRS) in England. Following a longstanding commitment from the Labour Government, tenant protections will be signiﬁcantly enhanced when the law receives Royal Assent and formally comes into eﬀect in 2025.

Representing a signiﬁcant shi towards fairer and more secure renting, the Bill addresses longstanding issues in the PRS.

Arguably the most important change is the abolition of Section 21, which allows ‘no-fault’ evictions, and the end of assured shorthold tenancies (ASTs), ensuring all tenancies will now be periodic.

Landlords will also face stricter requirements around property standards and maintenance, and the tightening of rent hike regulations. Improved tenant rights could lead to a more modern approach to private renting in the UK, but how does this impact your general insurance (GI) book?

Demand for solutions

The insurance industry will be signiﬁcantly aﬀected by upcoming reforms, prompting insurers to

create new products or modify existing policies to address emerging protection needs. As an intermediary, you have a unique opportunity to stay ahead of tenant and landlord requirements, especially with the resurgence in demand for protection.

Renter and landlord

While renters’ rights have signiﬁcantly improved, prevailing economic conditions continue to create uncertainty and vulnerabilities across the rental sector.

New findings released by LifeSearch have revealed that 29% of renters would struggle to pay next month’s rent if they couldn’t work due to injury or ill health. Only 14% of renters thought they’d manage to continue paying rent for more than three months and less than a third (28%) said their finances could cope with being signed off work for a long period.

Only 22% said they could cope ﬁnancially if diagnosed with a serious illness, while just 14% said they’d be able to cope ﬁnancially if a loved one were to become seriously ill.

Alongside this Bill, the best way to improve landlords’ rental income is with responsive income protection. With the payment

GEOFF HALL is chairman at Berkeley Alexander

protection insurance (PPI) missselling malpractice mostly behind us, products such as Accident, Sickness, and Unemployment (ASU) protection are popular for providing essential coverage and certainty, especially as they have signiﬁcantly evolved this year.

A modern modular approach allows you to offer your tenants coverage for personal accidents, income protection, and mortgage or rent protection in the event of an accident, illness, or job loss. This straightforward process allows you to present flexible options tailored to their circumstances, such as rent, salary, age, and family situation. This approach facilitates bespoke cover with affordable premiums, offering a balance of responsive protection and affordability.

Build pipelines

Protection products create new conversation opportunities and help sustain your business pipeline. They will also evolve with your clients as their lifestyle changes. Looking a er today’s tenants means you are established as a trusted adviser if they become tomorrow’s homeowners. These products can move with them when they change jobs and can grow as their family grows, with the option to add a spouse, partner or children. When their children grow up and start planning for their future, you can protect them too.

The protection revival is an opportunity not to be missed. It’s a door opener, a conversation starter and a chance to solve more issues for more people, both now and in years to come.

Is it time to retire the RIO?

Retired clients, or those heading towards retirement, can be an overlooked segment of the market. Some lenders have felt that lending to this segment is riskier, with an increased propensity for ill-health.

Yet for those in later life, there’s also reasons to be comfortable, too. You have long track records of good payment history and ﬁnancially savvy and capable borrowers, for example. Mortgage availability has been an issue as older borrowers sought out equity release lending to raise funds or consolidate debts. Yet not all borrowers are quite ready to pull the equity release trigger on their property. The possibility of eroding the equity, and therefore the inheritance they pass on, isn’t for everyone.

In 2018, along came the retirement interest-only (RIO) as an opportunity to plug the gap between a traditional mortgage and equity release. A RIO mortgage runs until a speciﬁed life event occurs, such as borrowers pass away or move into long-term care, but unlike equity release mortgage, there is an aﬀordability assessment involved.

While the opportunity seemed exciting, take-up has been below expectations – in the ﬁrst year of its existence a grand total of 660 RIO mortgages were wri en, and according to UK Finance, in Q3 of 2024 just 306 were advanced.

A ordability alternatives

In our experience, the majority of RIO enquiries fall down on general affordability. With a RIO, lenders are required to base this assessment on ‘sole survivor affordability’. If the main earner passes away, the surviving borrower must be able to afford the mortgage on their income, plus whatever amount is passed over

to them in pensions and so forth. RIO mortgages o en come with speciﬁc products, too, which tend to be a li le higher than standard residential rates in order to price for the perceived additional risk and complexity.

At Mansfield, however, we lend up to age 85 as standard; with a standard interest-only mortgage, we don’t apply the same stringent affordability test. We are happy to base it on both incomes without stressing affordability on a ‘sole survivor’ basis.

We would also base the aﬀordability on an interest-only basis as opposed to a repayment basis, which works particularly well for clients seeking shorter terms.

Further to that, we don’t have a minimum income requirement for interest-only cases which can be a barrier put in place by some lenders.

Creative support

In addition to not having a minimum income hurdle, we can be really ﬂexible about the type of income we are prepared to accept.

Broadly, we would only use earned income to age 70, but beyond that, we are happy to consider ‘non-earned’ or ‘passive’ income. This can come in the form of pension income, investment income or rental income. We’re comfortable in monetising assets too, even if they aren’t currently being drawn on.

Things like self-invested personal pensions (SIPPs) are quite common, and in that case, we will happily use a percentage of the value of the SIPP or investment.

We don’t expect the borrower to start drawing the funds just to tick a box for us. We’re interested in what they could draw as opposed to what they have, and this also means that they don’t need to start paying tax by drawing income that they don’t yet need.

While we are happy to accept all standard forms of repayment

TOM DENMAN-MOLLOY is intermediary sales manager at Mans eld Building Society

strategies to cover the capital element of the loan, we are also happy to accept downsizing as a repayment vehicle – utilising the equity in the existing property.

Borrowers can be supportive of downsizing because there’s less property to maintain as they get older, and we take great care to make sure there is something that borrowers can realistically downsize into.

We will consider the type of property available, and we require a minimum £150,000 equity within our Heartland Area, or £300,000 for London and the South East, and £200,000 elsewhere.

Common sense solutions

While with a RIO mortgage there is no speciﬁc end date, o en clients don’t have a requirement to have the mortgage forever.

With the cases we see, it’s o en that they just want a li le longer in the family home before they downsize.

Borrowers don’t necessarily need a mortgage in perpetuity, they just need a few more years, allowing them to tie up some loose ends and ﬁnd their retirement property.

We can consider terms as short as the initial product term, so this could be as li le as two years.

We’re a common-sense lender and able to take a more pragmatic view on circumstances.

If a case is a li le on the edge of our criteria, our business development managers (BDMs) and broker support team can speak to the underwriters directly and get them to eyeball the case before it comes in as an application.

By thinking diﬀerently, brokers can empower later life borrowers, rather than the pigeon-hole of a product set with rather limited appeal. ●

Navigating a ordability and income assessment

The mortgage landscape is evolving, particularly for later life borrowers, who face unique challenges when it comes to aﬀordability and income assessment. There are currently 19 million people aged over 55 in the UK, and this is expected to rise to 20.6 million by 2039.

As the population ages, people in this age group seek mortgage solutions that accommodate retirement plans and diverse income streams.

Later life borrowers who are unable to secure a ordable mortgages may face nancial instability, which can lead to higher default rates”

Traditional approaches o en fall short of considering these complexities, leading to a signiﬁcant portion of later life borrowers being unfairly assessed and facing higher interest rates.

The challenges

According to the Financial Conduct Authority (FCA) ‘Equity Release Review 2023’, only 1% of mortgage products are available for borrowers over the age of 55. It also found that in many cases the advice did not meet the standards expected.

Aﬀordability assessments are geared towards salary-dominant applicants. Later life borrowers are driven towards equity release, while their income and asset diversity are overlooked and undervalued.

Later life borrowers o en have complicated ﬁnancial situations that include multiple streams of income, like state pensions and private pensions, investment returns, and even part-time employment.

Traditional lenders fail to consider these scenarios, which results in later life applicants being unfairly assessed as higher risk, despite having substantial and reliable streams of income.

Innovative a ordability

According to Equifax, the 55-plus age group has the highest credit score in the UK, with lower default rates and signiﬁcant home equity. However, it is also one of the most under-served.

Some lenders are addressing these challenges by taking a more comprehensive approach to affordability assessments. This includes income across different phases of retirement, combining all sources of income, and proactively suggesting products that best fit the customer’s needs.

To help brokers with these complex cases, we have developed the LiveMore Mortgage Matcher®, which makes a maximum borrowing calculation based on the client’s income and expenditure, and si s through more than 200 products to ﬁnd a shortlist among a wide range of products.

Real-life implications

The socio-economic impact of not addressing these challenges is significant. Later life borrowers who are unable to secure affordable mortgages may face financial instability, which can lead to higher default rates and repossessions. This not only affects the individuals, but also has a ripple effect on the housing market and the broader economy.

The Intermediary Mortgage Lenders Association (IMLA) report on the challenges of lending in later life underscores the need for products that are tailored to the ﬁnancial realities of later life borrowers.

The report highlights several key points: Changing demographics: The over65 age group is the fastest-growing in the UK.

Asset rich, cash poor: Many homeowners have substantial home equity but limited liquid assets.

Need for ﬂexibility: There is a growing need for mortgage products like interest-only and equity release to accommodate the ﬁnancial needs of later life borrowers.

Stability: Ensuring that later life borrowers have access to suitable and ﬂexible mortgage products that can help maintain their ﬁnancial stability and prevent defaults and repossessions.

Stable system

Innovative lenders are making signiﬁcant strides in addressing the unique challenges that later life borrowers face.

By adopting a holistic approach to income assessment and aﬀordability, they are helping individuals secure be er mortgage deals and contributing to a more stable and inclusive ﬁnancial system.

As the population ages, the mortgage industry must evolve and meet the needs of later life borrowers, ensuring they can conﬁdently navigate their ﬁnancial futures. ●

LEON DIAMOND is founder and CEO at LiveMore

In Pro le.

The

Intermediary speaks with Simon Hayton, chief operating officer

in equity release Pure Retirement

at Pure Retirement,

looking back

on an

eventful year

Despite moving into the lifetime mortgages arena 17 years ago, Simon Hayton, chief operating officer at Pure Retirement, boasts a considerable breadth of expertise stretching beyond this market – not least due to his other life playing guitar in progfunk band ‘Voodoo Cartel’.

Across 27 years in financial services, Hayton has worn various hats across secured and unsecured loans, developing skills around tech, innovation and process efficiency, and learning to see things through the lender, funder and adviser lenses.

Hayton has been with Pure Retirement almost since the firm’s inception, seeing it grow from five to around 220 people. As the business readies itself for another growth phase, e Intermediary sat down with Hayton to look back at a challenging year for later life.

Over the years

Since joining this sector almost two decades ago, Hayton says the lifetime mortgage market has changed significantly. In the years following the 2007-8 Global Financial Crisis, for example, this market contracted significantly, to only a handful of lenders and funders.

been eroded, we’ve just added extra layers of value for consumers over the years.”

This means products can now be priced in a bespoke manner, considering factors such as age, postcode, property type, and incorporating medically enhanced products, for example.

Hayton continues: “Tailoring and protections have improved, like downsizing protection or the remaining customer being able to redeem chargefree on the death of the first customer. Those are all things that have been great for both the market and for consumers.”

A year of challenge and growth

Despite massive amounts of positive change for the lifetime mortgage industry, things have not always been on a simple upward trajectory. Looking back over 2024, Hayton points to some difficult periods for this market.

“Customer demand hasn’t waned too much,” he explains. “But the ability for us to find a product to meet that demand has shifted, due to global financial markets and UK financial markets. That has constrained loan-to-values [LTVs].

He adds: “Back then there was not a great deal of diversity of product, compared with where we are now. Now, there are many product lines and a fair number of funders and lenders. When I started, the concept of an [early repayment charge]-free partial repayment didn’t really exist. It was drawdown or lump sum, full stop.”

While this all means that the equity release market, in numbers, will be slightly smaller than in 2023, Hayton remains positive. The results for Q3 were starting to look more promising, while he is hopeful that Q4 has seen yet more

improvement.

Some important fundamentals, however, have stayed the same.

Hayton says: “There was still the main consumer protections that the now-Equity Release Council [ERC] has always been passionate about. Those safeguards have remained.

however, have stayed the same. this industry that have never

offering customers a reduced rate

“Those are fundamental parts of this industry that have never

For Pure Retirement itself, somewhat bucking market trends, there has been a slight improvement in volumes, with increased demand among clients wanting to make regular repayments, for example. This culminated in the lender launching an interest servicing option on its Heritage range, offering customers a reduced rate providing they repay at least 25% of the interest each month. The initiative also allows customers the ability to stop making repayments at any point, with the

stop making repayments

SIMON HAYTON

loan reverting to a standard roll-up product at the prevailing rate, with optional repayment facilities.

Making it work

Despite a challenging market, Hayton says Pure Retirement was deeply reluctant to make major staffing reductions this year, opting where possible to engage in reshuffling and reskilling to ensure that all resources were being used effectively during a difficult period earlier this year.

He adds: “We focused on having the right amount of resources to get the right outcomes for customers, and not break the model that wasn’t broken in the first place.

“We want to ensure we’re providing the best service, so we raised our game in terms of marketing and support for adviser firms. That’s one of the ways we’ve managed the challenge of the market not being able to supply the right products for the demand that’s out there.”

Performing well in this market, whether in or coming out of a difficult economic period, comes down to “sensible pricing, offering as much as we can in terms of the journey for the adviser and customer.” To this end, Pure Retirement has “invested a lot of time and effort in the postcompletion journey,” including launching its online account management platform MyPure.

This has not, then, simply been a matter of surviving the shocks, but also working to constantly evolve and improve the business.

One of the core milestones for 2024, Hayton says, was being able to fully embed Consumer Duty, following its introduction the year before. While the new regulation has prompted some changes to Pure Retirement’s policies, in large part this process has been about bedding in and proving the process.

“We did a lot of work in 2023, and this year has been about proving to ourselves that yes, we were doing the right thing for consumers,” Hayton says.

“The proof has been through the data analysis around customer outcomes.”

Tech developments

When it comes to the lifetime mortgage market, tools like MyPure are, Hayton says, a more advanced outlier than they might be in the standard residential space.

“We want to capitalise more on that, so that we’re the consumer and adviser choice for the best service,” he says. “That stands us in good stead and will help us increase our market share.”

Despite the potential stereotype that this market is slow to adopt, and perhaps does not face the same level of customer demand for advanced tech, Hayton argues that the current over-55 customer is typically tech savvy and wants to

transact online. Therefore, in this market as any other, tech is integral to “provide the best possible solution for the widest type of customer.”

Hayton says: “Over the 11 years I’ve worked at Pure, I’ve been passionate that it’s not just about having someone on the end of the phone – although we pride ourselves on always having someone available to speak to.

“It’s a bespoke journey for each individual customer. If you want to interact just via email, or just phone, or even just mail, you can.

“We’re moving next year towards an entirely online journey, so a customer can sign their documentation via DocuSign, but that’s if they want to. It’s not about a one-size-fits-all – I want to create the ability for all types of people to interact with us.”

Hayton cannot envision a world in which Pure Retirement entirely gets rid of its telephone service, noting that in many situations, the firm would not be able to fully ensure a customer gets access to all the value-add options without those conversations.

Where tech often comes into its own in this market is through data analytics, though even this, Hayton adds, often simply underlines and qualifies trends that humans already knew were there.

Looking forward

While global pressures are not going to suddenly disappear come the new year, Hayton has a positive outlook for 2025, for those willing to put the work in.

He says: “We’re having to find opportunity rather than it simply being landed upon us. To do that, we’re looking at carving out product niches, such as interest servicing mortgages – we’re going into 2025 looking to make that more of a part of the lifetime mortgage offering. We believe it creates the right outcome for consumers that want to make regular payments.

“We’re very much in the camp that anything like this has got to be as simple as possible for the consumer, and for the advisers to be able to market it appropriately. We believe we’ve hit the right balance there. Hopefully we’ll be able to ride that wave into 2025.”

Hayton sees next year as a chance to open up Pure Retirement’s market share further, and return to operating in a higher LTV space given the right conditions. Indeed, he notes that the house price outlook is improving, and there does not appear to be a risk of “massive downturn” on the horizon, all of which bodes well for lifetime mortgages.

He concludes: “We’re hopeful we can forecast that there won’t be a serious black hole, which should open up higher LTVs and drive improvement across the entire market in 2025.”

Overworked and under-served

The role of technology has become vital in every sector of business, yet despite the strides made in recent years, a signiﬁcant gap remains in the tech provided by lenders, impacting brokers’ eﬃciency and overall experience.

According to recent findings from finova, 39% of brokers frequently find themselves stuck in paper-heavy processes; a substantial portion (58%) currently spend between five to 10 hours each week on administrative tasks alone, with 41% reporting that this figure can stretch to 11 to 20 hours some weeks. As a result, there is a growing call for lenders to invest in technology that genuinely alleviates these burdens, improves productivity, and ultimately helps brokers and end consumers receive the best service and timely outcomes.

While the majority of brokers acknowledge that the technology provided by lenders – such as online portals – has made an impact on their workload, the beneﬁts of some of these features are o en tempered by persistent technical issues.

Almost half (46%) report consistently encountering glitches, which can get in the way of brokers delivering a timely and eﬃcient service to their clients. It’s important to remember just how crucial brokers are in the mortgage industry –according to McKinsey, roughly 75% of home loans in the UK are originated by brokers.

Such technical shortcomings not only cost them crucial time, but also diminish their conﬁdence in working with lenders.

Challenges and opportunities

It’s not that technological investments aren’t happening, they just aren’t having the necessary impact. 73% of brokers report spending more time

on administrative tasks now than they did prior to upgrades provided by lenders.

This trend points to a gap between the intended beneﬁts of digital solutions and the actual impact on brokers’ day-to-day work.

Tasks like speaking to lenders about new rates and criteria were highlighted by 48% as a major time drain. Similarly, document scanning, digitisation and quality assurance continue to consume significant time and effort. These findings signal crucial areas for lenders to focus on.

What do brokers want?

Looking at the features most in demand, real-time application tracking was seen as the most valuable tool, providing transparency and reducing follow-up times on loan applications. Automated document processing, as well as data analytics and reporting, was also highly valued.

These functionalities allow brokers to move applications forward without ge ing bogged down in repetitive admin tasks.

38% of brokers say that an enhanced user interface and user experience would be helpful, suggesting a need for more intuitive, user-friendly platforms. Additionally, a smoother

JOHN TILZEY is sales director at nova

integration process with brokers’ systems and faster platform performance were cited as critical upgrades.

Beyond speciﬁc tech features, brokers are also looking for be er access to support, which could help mitigate some of the top issues and reduce downtime.

A strategic imperative

As brokers continue to bear the brunt of administrative tasks, the call for more sophisticated and reliable technology is clear. By prioritising investment in the right tools and intuitive platforms, lenders can directly address the ineﬃciencies that get in the way of broker productivity.

Real-time tracking, seamless integration, enhanced security, and eﬃcient customer support should be top priorities in any technology roadmap for lenders for 2025.

In doing so, lenders stand to create stronger relationships with brokers, ultimately beneﬁting the clients who rely on both parties for a smooth lending process. ●

Shaping the future of mortgages in 2025

IFTHIKAR MOHAMED is founder at MortgagX

In a world where Apple has launched generative artiﬁcial intelligence (AI) on its devices and Meta’s collaboration with Ray-Ban has brought AI glasses to the market, technology is evolving at a breakneck pace. What does this mean for the mortgage industry in 2025?

The adoption of Open Banking has been slow, particularly among consumers, with acceptance levels lingering below 15%. However, AI integration could act as a catalyst for wider acceptance. By enabling smarter, more personalised insights, AI is transforming how ﬁnancial data is aggregated and analysed.

Challenger banks have already started collaborating to provide clients with a uniﬁed ﬁnancial picture. High street banks are following suit, integrating multi-bank connectivity into their apps.

This isn’t just about convenience. By understanding their clients’ ﬁnancial habits more comprehensively, banks can cross-sell products tailored to individual needs. These insights unlock new revenue streams while enhancing the client experience.

Banking beyond bots

From branch visits to chatbots, the evolution of client communication has been signiﬁcant. As consumers increasingly engage with tools like ChatGPT or Gemini, why haven’t banks fully embraced voice assistants?

Voice assistants could handle complex transactions, schedule appointments, and even provide financial advice. Behind the scenes, AI would analyse vast amounts of data to ensure seamless and secure interactions. This innovation could redefine how clients engage with financial institutions.

Tasks such as data extraction and validation, risk assessment, creditworthiness evaluation, fraud detection, and suitability checks are time-intensive yet critical. Generative AI can streamline these processes, delivering faster, more accurate outcomes.

AI-driven onboarding solutions can simplify processes like document veriﬁcation, data collection, and identity checks. For banks, this means delivering a seamless experience. For clients, it means reduced wait times and greater convenience.

In terms of products, ‘day-one mortgages’ are becoming a reality, and AI is the driving force behind this transformation. What once took days or even weeks could soon be accomplished within hours.

This not only improves eﬃciency, but also enhances client satisfaction. In a competitive market, the ability to oﬀer near-instant approvals could set leading banks apart from their peers.

By analysing a client’s ﬁnancial history, spending habits, and goals, AI can recommend tailored products that align with individual needs. For instance, ﬁrst-time buyers could be guided to schemes that suit them, while existing homeowners receive alerts about remortgaging opportunities.

Security and compliance

Advanced anomaly detection and behavioural analytics allow AI systems to identify potential fraud in real time. For example, irregular transaction pa erns or discrepancies in documentation can trigger alerts.

As mortgage applications increasingly shi online, robust AI-driven security measures will be essential. Biometric veriﬁcation and predictive algorithms will ensure

that the digital mortgage journey remains secure, while fostering trust among clients and lenders. AI can also automate compliance checks and ensure applications meet regulatory requirements.

Natural language processing (NLP) tools can review documents for inconsistencies with local and international standards. This not only reduces manual errors but also expedites approval timelines.

Predictive analytics is reshaping decision-making in the mortgage sector. By analysing market trends, housing data, and economic indicators, AI can predict shi s in property values and interest rates. For lenders, this enhances risk management by enabling proactive strategy adjustments. For borrowers, it oﬀers timely advice.

Smarter and faster

While AI is automating many aspects of the mortgage process, it is unlikely to replace human expertise. Instead, it fosters collaboration, where AI handles repetitive and analytical tasks, leaving brokers to focus on building relationships and providing strategic guidance. This enhances eﬃciency and ensures the mortgage process retains a personal touch.

The industry is poised for a tech revolution. The question isn’t whether AI will reshape the sector, but how quickly institutions will adapt.

Those that embrace advancements will be be er positioned to lead in an increasingly competitive market. The future of mortgages is smarter, faster, and more client-centric, and AI is the driving force behind it. ●

Poor processes harm more than the bottom line

Our latest research has given some worrying insights into the impact poor systems can have on the mortgage value chain. It revealed the damaging emotional and economic impact the outdated applications process is having on consumers, particularly among the younger generations.

While there was a level of stress recognised among all age groups who had gone through the process, there was a notable generational divide, with many younger applicants ﬁnding that the stress hugely impacted their work and home life.

A shocking majority of 18 to 24-year-olds (89%) said that the stress of the lengthy mortgage application process had led to them giving up on lifestyle habits such as self-care (18%), exercising (22%) and spending time with family and friends (22%).

Among this age group, the eﬀect was also being felt in the workplace, with nearly a quarter (22%) admi ing to calling in sick to work due to mortgage application stress, with 12% wishing they had known beforehand how much time they would spend at work distracted by mortgage admin.

When you take into account that it can take up to anything from six weeks to six months to complete on a property, that is a signiﬁcant amount of time where there is not only a potential impact on wellbeing, but where workplace productivity is being hampered, something that Keir Starmer has called out as a priority for the new Government.

Many highlight that a be er understanding of the mortgage process beforehand would have helped to ease some of the stress involved in the application, and a

number of applicants admi ed to not knowing basic mortgage terms such as ‘loan-to-value’ (LTV) and ‘standard variable rate’ (SVR). More education surrounding the mortgage application process would be welcomed among applicants, with four in ﬁve people that have applied for a mortgage (81%) believing that mortgages and ﬁnancial education should be on the secondary school curriculum.

Along with more transparency and a be er understanding of the process, improvements to the process itself, such as fewer delays (37%), less paperwork (36%) and be er online tools (15%) were all cited as areas that could help to relieve the stress.

Legacy lag

These ﬁndings underline that not only is there a need for more understanding and education about the mortgage application process, but that poor systems and processes – more o en than not in the shape of legacy tech –are playing a major part in the stress of the home buying journey. Nor is this an issue that can be pushed to the side, especially with Labour’s ambitious house building plans.

Right now, the reality is that despite the innovation across the banking sector, many lenders are still working with archaic legacy tech from 40 years ago that is just not agile and robust enough to keep up with today’s market.

As a result, buyers – in particular younger generations and firsttime buyers who may have a prior assumption of efficiency – are very quickly finding their experience does not match up to their expectations.

Slow, expensive systems are not only a hinderance for borrowers, but brokers and lenders, too. They are costly to maintain and slow to react

JERRY MULLE is UK managing director at Ohpen

to market changes. This sluggish response can impact proﬁtability and leave lenders lagging behind.

Systems that can provide a faster and more transparent and inclusive process, where the consumer feels empowered with the right tools to make informed decisions, will go a long way to making the home buying process less stressful, as will a be er understanding beforehand.

Financial education has a major role to play in reducing stress, particularly for younger generations and ﬁrsttime buyers, and it is something that – with the right support from schools and ﬁnancial institutions – can be turned around.

At the moment, nearly three-times as many Gen Zs (28%) found that the mortgage application was more stressful than moving itself, compared to (11%) of Baby Boomers. This generational diﬀerence tells us that what was considered advanced years ago is no longer ﬁt for purpose, and is not meeting the expectation of the younger buyers coming through.

First-time buyers are already facing some of the toughest conditions in years, and although the Bank of England did reduce interest rates in November to 4.75%, further reductions in 2025 are expected to be slower.

It is down to loan providers and ﬁnancial institutions to do what they can to support borrowers and reduce the anxiety associated with buying a home, by providing be er systems and be er communication to make the home buying process more appealing. ●

Security standards: Making the grade

Anew Code of Practice for So ware Vendors is set to be introduced by the Government. Flagged as a necessary tightening up of data security, it ended its consultation phase in August and is expected to be introduced in the near future.

The code sets out minimum standards that should be in place to ensure so ware providers’ technology can withstand a cyber a ack. ‘Secure by design’ is a core tenet of the code of practice, which puts the responsibility for cyber security squarely on the vendor throughout the lifecycle of a product or service.

Security pillars

It has four basic principles: secure design and development, build environment security, secure deployment and maintenance, and good communication with customers to ensure eﬀective risk management.

The code is going to be voluntary, and there is nothing that will require any vendor to put in place any of its recommendations. However, I am sure that, following its implementation, it will become a key competitive advantage for those that have it.

The ﬁrst voluntary code in this area has had just such an impact.

ISO/IEC 20000-1, the international standard focused on ensuring IT service providers meet the needs of their customers, was launched in 2005 and came out of the old British Standard 15000.

It provided a framework for planning, managing and improving IT services which, over time, came to be embraced by a large number of providers as a ‘gold standard’. Some 27,000 ﬁrms worldwide now have its logo proudly featured somewhere on their masthead or le er footer, 19 years a er its launch.

Initially, like ISO/IEC 20000-1, take-up of the new UK code of conduct

is going to be slow among technology providers. They will see its costly and time consuming checklists and external validation as a drain on scarce resources. Compliance budgets are always tight, and this will be viewed as an unwelcome extra burden. But some – the early adopters – will be quick to see its potential over and above its obvious internal use.

Like ISO/IEC 20000-1, they will look to leverage it as a third-party quality diﬀerentiator providing a powerful unique selling point (USP) when pitching for new business.

The code’s use will accelerate once their own customers appreciate its value in the provider selection process, and it gets to be referred to up and down the supply chain as evidence of cyber resilience.

Anyone who has ISO/IEC 200001 accreditation, which remains voluntary, knows the lengthy procedures and analysis that goes into obtaining and retaining it.

It will come as no surprise that there are still quite a few IT vendors not in a position, or unwilling, to achieve it. They certainly will not be able to demonstrate compliance with the new so ware vendors’ code of conduct any time soon. The problem for them is that cyber security is set to become

DAVID WYLIE is commercial director at LendingMetrics

even more of an issue than it is at the present time. The growing volume of sensitive data and analysis that IT suppliers hold, coupled with the mounting threat from bad actors, will prompt so ware buyers to demand more competence in this area from suppliers.

The only eﬀective way to demonstrate this is via third-party accreditation. So ware vendors, such as LendingMetrics, which already have had ISO/IEC 20000-1 in place for some time, will not ﬁnd the new code too much of a stretch. Meeting such a standard over time leads to a mindset that ensures rigorous design, testing and validation is encoded into products and services from the outset. So compliance with new or uprated standards is not an issue.

Those vendors without the earlier standard in place are not in such a position. They are going to ﬁnd it more problematic, not only to meet the requirements of cyber security standards going forward, but to win new business.

How data and insight will shape Consumer Duty

We are about to enter the third decade of mortgage regulation in the UK – for those who can recall M-Day in 2004, it might feel strange to think that was now 20 years ago. For mortgage brokers, the latest iteration is the Consumer Duty, now 18 months on from its implementation for new and existing products or services that are open to sale or renewal.

While ﬁrms are still developing their understanding of the duty, the industry is now far enough into this new world that more nuanced approaches are beginning to emerge.

FCA intention

In its initial assessment of how ﬁrms were embedding the duty, the Financial Conduct Authority (FCA) highlighted several examples of good practice, including where a ﬁrm had “reconsider[ed] their role in distribution chains and take[n] steps to support good outcomes for the customer even if they do not have direct relationships with consumers.”

For all financially regulated firms operating in the mortgage market, this observation is particularly relevant. Our customers’ distribution chains are possibly the most complex in financial services, made more so by the fact that several elements are unregulated or overseen by regulators other than the FCA.

An estate agent is not subject to Consumer Duty, and yet has a pivotal role in helping borrowers identify the property they want. From a lender’s perspective, that role is absolutely critical – it accounts for 50% of their decision to lend. Conveyancers and valuers have long assumed

responsibility for supporting a lender’s ability to make a responsible decision based on asset value and, theoretically, title risk.

It is worth calling to mind the leasehold scandal, which saw leases enshrining the title holders’ commitment to pay ground rents, and service charges that doubled indeﬁnitely. The leasehold debacle exposed failures in the wider distribution chain. This ma ered under treating customers fairly rules (TCF), but under Consumer Duty it ma ers even more – especially for those individuals who hold personal responsibilities under the senior managers certiﬁcation regime.

The FCA has highlighted various areas for improvement, including where firms were waiting to see if the regulator will intervene to address an issue rather than tackling it themselves. It says: “This is likely to cause firms more complexity in the long run, especially if consumer redress becomes due. The Duty requires firms to proactively identify and address issues and risks of harm.”

It adds: “Firms should not be complacent and assume that they can just repackage existing data. We want ﬁrms to think seriously about what information they need to really understand their customers’ outcomes and issues they may be facing.”

Third, the regulator says: “We want ﬁrms in the same distribution chain to share relevant information with each other. This will help ﬁrms to quickly address issues to prevent consumer harm and deliver good outcomes.

“For example, manufacturer ﬁrms need to inform distributors of the characteristics of a product or service, its target market and the value it is intended to provide to customers[…] Firms in a distribution chain should

consider what information they need from each other, with the joint goal of delivering good outcomes for the customer.

“In some situations, ﬁrms do need to consider actions by other parties in the distribution chain.”

Taken together, the regulator’s intention is clear – and it demands a much more lateral approach to understanding customer outcomes.

That borrowers were allowed to take on onerous, escalating leasehold terms demonstrates a very poor outcome. Furthermore, there are unintended consequences on the future consideration of mortgagability, alongside requirements for costly indemnity policies. Once we start questioning the mortgagability of a property then we will need to consider whether this leans into negative impacts on capital values.

Clearly, there was not enough awareness or foresight relating to the medium to long-term ramiﬁcations of these leasehold clauses, which may not have been obviously visible within a complex and long lease.

The FCA requires ﬁrms to be proactive, and that means reviewing the insight lenders and brokers have of the broader customer journey.

This must include ‘diﬀerent’ assessments of the property, and that means data services that can quickly and accurately identify potential risks for the lender’s balance sheet, the broker’s advice and borrower’s outcome.

This is the beginning of widening the reach of the Consumer Duty. Expect more. ●

STEVE GOODALL is managing director at e.surv

Helping landlords keep up with tenants’ changing demands

Tenants in shared accommodation now expect more from a property, with growing demand for bespoke living spaces including adapted facilities such as toilets and showers within their rooms. Add kitchenettes to the equation and you could have multi-unit freehold blocks (MUFBs) with shared utilities or even hybrid multi-units incorporating both self-contained and HMO elements.

The problem landlords can face is finding a lender able to support these complex property types. Here at CHL Mortgages for Intermediaries, we’re in tune with the ever-changing rental market. We listen closely to broker feedback, as well as analysing landlord and market trends, to create products to keep up with their clients’ evolving demands.

Our larger HMO/MUFB range could be ideal for landlords with more complex properties and includes 2 and 5 year fixed products up to 75% LTV with a choice of fee options.

Here’s how we could help. Imagine your client plans to purchase a four-storey former waterfront office unit with a basement and convert it to a bespoke multi-tenant residential property.

10 bed HMO

Rooms include toilets and showers

Seperate kitchens and toilets

Three one bed flats

Two studio flats

They’ve already received planning permission from the local authority and have funds in place to complete the development to a 10-bedroom HMO, each with toilets and showers, and a shared kitchen and communal area; three self-contained short-term let flats; and two self-contained studio flats with a separate entrance.

They need a lender who can provide a long-term exit once the development is complete and thanks to our ability to consider complex hybrid applications, we’re able to offer them the mortgage they need.

To find out how CHL Mortgages for Intermediaries could help, get in touch with your business development manager or visit www.chli.co.uk.

View our Product & Criteria Guides at chli.co.uk

Case Clinic

Want to gain insight into one of your own cases in the next issue? Get in touch with details at editorial@theintermediary.co.uk

CASE ONE

Retired couple wanting interest-only

Aretired couple currently have a small interest-only mortgage, maturing next month. ey are looking to secure a repayment mortgage using pension-only income rather than the alternative of equity release or retirement interest-only (RIO).

WEST ONE

West One can look to lend to clients that are currently retired on an interest-only basis, taking the term up to a maximum of 75 years of age at end of term.

e minimum term we would allow is ve years and we would apply a ve-times loan-to-income (LTI) multiple to the pension income.

e pension would need to be a private pension, but we can look at a state pension provided it is not the applicants’ primary income.

To qualify for interest-only, the applicants’ income must be £50,000 sole, or £75,000 joint. At least one must earn £50,000, and there must be a minimum of £150,000 equity in the property.

UNITED TRUST BANK

UTB could assist with this case subject to a ordability and the mortgage term required. Pension-only income is acceptable and can be considered up to the 85th birthday of the eldest applicant. Private pensions including SIPPs and the state pension can be used to support a ordability.

HARPENDEN BS

We can o er standard repayment mortgages to retired individuals, with the term depending on their income and the sustainability of this. With

cases like this, I’d recommend getting in touch with a business development manager (BDM) to explore the options. Please note, our minimum loan is £150,000.

CASE TWO

Self-employed secondtime buyer

Aclient in his 20s currently owns his property, which was valued at approximately £200,000.

Following pervious struggles to get a mortgage as a rst-time buyer, he is now looking to move up the property ladder and purchase a bigger home.

However, the client recently became selfemployed and has taken a slight pay cut as a result. In addition, he no longer has guaranteed working hours as his job now operates on a freelance basis, and worries this will impact his ability to borrow. He also wishes to purchase his next property with his partner, who has never previously owned property.

WEST ONE

West One can consider a self-employed applicant once they have completed 12 months of trading, calculating income from the client’s SA302 and tax year overview, capped to 75% loan-to-value (LTV). Income would be calculated with these gures. Provided one applicant is already a homeowner, we would treat the whole application as a secondtime buyer case.

UNITED TRUST BANK

UTB requires two years’ evidence of pro ts to consider using income from a self-employed

applicant. We could consider the joint application if the a ordability requirements were satis ed using just the partner’s income.

HARPENDEN BS

Our ability to lend here depends on what evidence is available for the rst applicant’s selfemployment, as we require a minimum of one years’ accounts, with a projection to back up the sustainability of the business income. e other concerns shared here are not an issue for us, so it would simply come down to the income details and if this can be used for a ordability.

CASE THREE

Leveraging a buy-to-let investment

Aclient is looking for an interest-only loan at £400,000 on a home with £800,000 in value. However, the property was downvalued by £100,000 by a previous lender. at lender’s maximum limit on interestonly for residential was 50% LTV for this case. erefore, the maximum loan was a lot less than the client needed. e client also owns a buy-to-let (BTL) property and is hoping to use

this to their advantage, while keeping monthly costs relatively low.

WEST ONE

West One can look at an interest-only loan up to 75% LTV, so we could look to arrange the loan required on the residential property.

To qualify for interest-only, the income must be £50,000 sole or £75,000 joint. At least one applicant must earn £50,000 and there must be a minimum of £150,000 equity in the property.

We operate a ve-times LTI multiple. In addition, the borrower could look to use the BTL property to raise capital, which could then help fund the residential transaction through raising equity.

UNITED TRUST BANK

UTB would consider this application up to 75% LTV on an interest-only basis subject to a ordability. We limit the LTV to 70% when using downsizing as an exit strategy.

e sale of the BTL property could be considered as the exit strategy providing that there is su cient equity, and we would calculate 85% of the net equity as the useable value towards the exit.

HARPENDEN BS

We can consider interest-only loans up to 75% LTV with a minimum equity requirement of £150,000, meaning that even with the down-value, this is within policy limits. We can consider background rental income towards a ordability to help boost this where necessary. ●

The bene ts of mentoring in the mortgage industry

As someone who has beneﬁted from being mentored by some of the industry’s most respected people, it was a no-brainer for me to decide to help others achieve their goals and fulﬁll their potential.

27th October marked National Mentoring Day, and coincided with the one-year anniversary of taking on my ﬁrst mentee. This provided the perfect opportunity to reﬂect on my experiences and encourage others in the industry to support the next generation of professionals coming through.

My experiences of being mentored in the past were incredibly positive. It was so beneﬁcial and really helped progress my journey in the industry. Being able to discuss challenges and obstacles, as well as share great news stories, has been key to my personal growth.

As I’ve been in the industry for so long, and have worked across the sector, including at a mortgage club, broker, challenger bank, specialist lender and now a building society, I feel I have a lot of experience to share.

So I signed up to be a mentor through the Association of Mortgage Intermediaries (AMI) and Intermediary Mortgage Lenders Association’s (IMLA) Working in Mortgages scheme, which currently has more than 300 mentors and mentees working together on professional development and career progression.

My ﬁrst mentee approached me through the scheme’s search platform in October 2023, and we are still working together now. The second came to me in August this year, and I have a third about to start. They are all women and all working at

lenders – two at major banks and one at a building society. I think it helps if mentees ﬁnd a mentor with similar life experiences so they can beneﬁt from that shared understanding.

For example, it can be hard working in a very male-dominated world and while things have changed over the years, I wouldn’t want any perceptions related to this to be a barrier to young women coming into the industry.

I was happy to share how I have overcome my own personal challenges in this respect, and to make sure they don’t let opportunities pass them by for this reason.

You can use your personal experiences to empower mentees to face similar challenges head on.

Bene ts for mentees

I have regular sessions with my mentees where I take time to discover what they are looking to achieve through mentorship, and we set measurable goals that we regularly review. The Working in Mortgages platform has some great tools to help plan, and to really focus on the desired outcome.

In our meetings we always start oﬀ talking about what we have been up to, how we are feeling, and then move to the goals to see how that is progressing. We talk about what they are learning and where they feel they need support, and then we set out what we are looking to achieve by the next meeting.

But it’s not just about goal se ing. I have an open-door policy for mentees to contact me whenever they need to. It could be a particular work problem that they don’t know how to respond to, or perhaps they just need to chat about day-to-day challenges.

I asked one of my mentees to share what she gets from the process, and

CLAIRE ASKHAM is head of mortgage sales at

Buckinghamshire Building Society

she said: “Having Claire as a mentor has been an incredible experience and learning journey.

“Claire has a wealth of experience and knowledge which isn’t just limited to job speciﬁcations, but personal a ributes too.

“Since starting my mentoring journey with Claire I have regained conﬁdence in my ability and have gained valuable insight to how I can grow and develop personally and in my career.”

I get so much joy from seeing others progress and follow their dreams.

Bene ts for mentors

The beneﬁts of mentoring work both ways, though. Yes, you’re giving up your time to help someone else, but there are advantages for both. There are things that my mentees have supported me with.

I also wanted to be able to develop my own coaching style with someone who was outside my workplace but still within the industry. I’m in my last year doing my Master’s on strategic leadership, and there are certain modules that I’ve been able to put into practice with my mentees.

There’s also a beneﬁt to the industry. Mentoring is great for promoting knowledge, growth and inclusion across the sector. There’s a desire for it, too. I’ve had to turn down other requests because I don’t have time for any more at the moment, but I’d really encourage others to become mentors –there’s so much to gain from it. ●

It’s a network’s duty to deliver a wide range of options

AHMED BAWA is CEO of Rosemount Financial Solutions (IFA)

It’s been a busy time for Rosemount Financial Solutions (IFA) when it comes to building new partnerships with lenders and distributors. First, we partnered with Loans Warehouse to provide our advisers with a simple referral route when they have clients with second charge or bridging ﬁnance needs.

Then, we bolstered our lender panel with the additions of both Together and Perenna in recent weeks.

These partnerships don’t happen overnight. It is only by really ge ing to know those running these businesses, and what they oﬀer, that you can get a sense of their ethos and values.

That we have brought them on board to the Rosemount family speaks volumes about their determination to deliver a next level service to the sort of customers that Rosemount advisers work with on a daily basis.

The full toolkit

The mortgage market has become more complicated in recent years. The days of most clients being classed as ‘vanilla’ are long gone, if they ever really happened at all.

As things have become more complex, it’s crucial for networks to ensure their members have the widest range of options open to them, so that they can provide their clients with ﬁrst-class advice.

For example, we know that advisers are increasingly likely to have clients who are self-employed, a client base that is not always brilliantly served by mainstream lenders. It’s a borrower subset that Together caters for well, meaning that advisers have a consistent lender to work with.

Similarly, the rate volatility of the past few years has meant many borrowers would value the option of

ﬁxing their rate for far longer than has historically been available. That’s where lenders like Perenna have made their name, providing ﬁxed terms of up to 40 years.

These clients might only represent a handful of cases each year for individual brokers, yet they want to provide them with the best possible guidance. Networks must have lender panels that deliver a wide range of options, so that even those unusual cases are well catered for.

An eye on diversi cation

It’s not just about delivering for existing clients with broadening needs, however. Having a wider range of lenders on the panel also supports advisers looking to diversify, or to dip their toe into new areas of the market.

Diversiﬁcation is always a good idea for advisers, ensuring that their business and revenues are not entirely reliant on a single area of the market.

If your business is dominated by residential transactions, then if something happens to dent buyer demand – as it inevitably does from time to time – then you’ll see the health of your business take a turn for the worse.

But if brokers diversify and cover a range of diﬀerent areas then that’s less of an issue.

It’s something we have seen ﬁrsthand at Rosemount over the last year, with a greater number of advisers focusing their eﬀorts on improving their protection sales.

This isn’t always something that comes naturally – protection must be sold, a er all, since clients are unlikely to walk through the door speciﬁcally looking for income protection or life insurance.

Yet improving your protection take-up is important, not only for

the sake of your revenues, but from a regulatory perspective, too.

The introduction of Consumer Duty has only made this more important.

Adding lenders and providers is only one part to helping advisers diversify, though; a good network will also have a framework in place to help the adviser develop their skills in covering those new areas.

At Rosemount, for example, we have held a host of masterclasses and surgeries for members to help them feel more comfortable with the selling process, and to pick the brains of peers about their own experiences.

Diversiﬁcation can only succeed if the adviser has the right structure around them. Networks need to play their role in delivering that.

Working together

It’s exciting that new lenders and distributors are emerging to help provide more bespoke and nuanced products.

As the market becomes more complicated, these sorts of specialist products and services will be in greater demand than ever before.

Networks need to make sure that their members have access to a suﬃciently broad range of lenders to cater for those diverse needs, as well as having the support structures in place to help advisers add new areas to their business.

If your network isn’t doing that, then it may be time to shop around for a new one. ●

Have a really happy Christmas

You will likely have heard the words, ‘Happy Christmas!’ quite a few times by now, but what do they really mean? What are you doing to make happiness more of a certainty at this time? Here are a few lessons from psychology:

Ghost of Christmas Past

Let’s start by le ing go of some ancient history, saving just the best bits. Instead of hankering back, slavishly trying to recreate your childhood and failing, be selective in your memories.

What were the best bits? As a child, for example, being given the gi of time and a ention outweighs the amount of money thrown at halfdesired toys.

Sometimes when people return to the body of their family for the festive season, they slither back into old ways, going back to being the truculent teenager, resenting that their sibling got more a ention or praise, or going through the motions of activities they have long lost interest in.

Be bold and make changes. Resurrect the best bits and dump the rest. Consider how you might create new glorious ways of celebrating that suit your life today.

There’s a positive psychology concept: if you were born yesterday, which problems, hang-ups, phobias,

or feuds would you deliberately choose to pick up, and which would you let go of? This is a good time to think about being reborn diﬀerently. Start with a clean slate. Do it diﬀerently.

For example, if everyone annually eats and drinks too much, gets into a political argument and starts falling out over the Christmas pudding, decide now how to change the pa ern. Stop being a prisoner of your childhood. Aim for forgiveness before you even start.

Present and future

Cultivate positive emotions. Leave the ‘Bah Humbug!’ to Scrooge and the Grinch. Be a child. Deliberately saturate yourself in the best of the season. Go look at the Christmas lights with wonder.

I don’t know how many times I’ve heard The Pogues’ ‘Fairy Tale of New York’ already. Don’t let it irritate you. Just belt out the lyrics as loudly as you can. One psychological trick is to ‘dance in the moment’. Savour every aspect of the season. Use all your senses to really experience all the old clichés – pine needles, Christmas markets, seasonal sleet and rain!

Count your blessings, or even name them one by one as the chorus goes, and notice abundance rather than feeling deprivation.

If you are reading this, you are likely more aﬄuent than most of the

Build a legacy. Decide what you want to be known for in your family’s Christmas history”

world. So, ﬁnd gratitude for what you have. Start new traditions and rituals. Build a legacy. Decide what you want to be known for in your family’s Christmas history.

Best Christmas gifts

Many publications around this time will be full of lists of the best presents. Here are three that can be adapted for anyone at any age, don’t cost the earth, and may make the world a happier place:

Commit random acts of kindness

Here are some to get you started: Ask an elderly relative about their favourite war story or anecdote –and pay real a ention!

Give your spare scarf or jacket to a homeless person, but more importantly, use this as an opportunity to have a human conversation with them.

Let someone go in front of you at the supermarket, with a smile.

Tell someone how great they look in the outﬁt they are trying on in a store.

Hold a door open and smile at everyone who comes through –even if they didn’t get the memo about gratitude.

Create the ‘Amazing Wishlist’

My family were once all asked to put our desires on a wishlist with a certain online retailer to give people ideas at Christmas. We felt awkward doing it, so I devised the ‘Amazing Wishlist’ to go in its place.

I asked for a day in my brotherin-law’s workroom, using all the scary woodworking equipment I associated with James Bond movies. I made a thing!

My niece asked for a supply of homemade lime curd. I continue to make it for her occasionally to this day, but have to include lemon just so I can call it Leimon Curd. It is now a beloved tradition.

What are all the things you would love to have at Christmas that don’t cost the earth? Breakfast in bed?

Homemade jam? A day out with your sisters? Someone to play boardgames with you? A homemade card from your children?

Come up with your own fantastic personal wishes and let people know what you would really want.

Give experiences rather than stu

The Beautiful Day: What would be the best and most beautiful day you could design for someone you love? Would it be spent walking in the woods a er a leisurely breakfast, or whirling around on a carousel at the fair? Design every moment of their Beautiful Day from the ﬁrst cup of coﬀee or favourite tea until bedtime – and make it happen.

The Gratitude Le er: Start writing down every reason you have for feeling grateful to a person. Keep going till you have covered every aspect of their behaviour or your relationship. Without telling them your reason, book time with them. Read the le er to them and hand over the le er at the end of your meeting. Don’t aim to get anything back from them in this session. Your only goal is to express fully your sense of gratitude for what they have done.

Along these lines, my own daughters gave me one of the best gi s ever. A mug ﬁlled with coiled up pieces of paper, each one detailing a reason they love me – some humorous, some heartfelt. Years later, I can simply look at the mug and feel loved.

So, in the spirit of Positive Psychology – have a really happy Christmas! ●

AVERIL LEIMON is co-founder of White Water Group

Second charge

Buster Tolfree, director of mortgages at United Trust Bank

James Gillam, client relations manager at Pure Panel Management

Joe Defries, managing director at The Loan Partnership

Kevin Tilley, director at Loanable

"What a great night! Having been shortlisted in no less than nine categories we went along with high hopes of winning something, but to come home with three trophies was amazing. UTB has always been a vocal supporter of the second charge industry, and these awards show how introducers feel about UTB Mortgages, the products we oﬀer and the service we provide. I’m excited about the many product and proposition enhancements we are aiming to reveal in January and throughout 2025.”

“It’s a fantastic event, and it’s great to see second charge mortgages being recognised with their own dedicated awards. Second charges are such an important part of the industry, and events like this play a vital role in raising awareness and highlighting the value of this product. We’re proud to support an initiative that celebrates excellence and innovation in this sector.”

“We had an incredible evening at the National Mortgage Awards, and we’re thrilled to have won an award and been recognised for our eﬀorts. It was also a fantastic opportunity to reconnect with industry colleagues, sharing insights and celebrating our collective achievements.”

“A brilliant talk by Martin Bayﬁeld, it was great seeing so many friendly faces, and the highlight was winning the Next Big ing broker award, establishing Loanable in the second charge sector. We are looking forward to next year's awards.”

Matt Tristram, managing director at Loans Warehouse

“ e original idea was to have an event that was based just on our industry instead of just being a category, it’s been long overdue. e Intermediary put a spotlight on an amazing industry that o en gets forgotten. It's always good to win award, but when you're in a room with all your competitors and peers, for your peers to have voted for you as the best in your industry is as good an accolade as you could ever receive.”

Second charge

Tony Marshall, CEO at Equi nance

“First and foremost, congratulations to e Intermediary. It is long overdue for the sector to begin getting the recognition it deserves. All of us at Equiﬁnance were delighted to win the Best small/medium lender category, and congratulations to all the other award nominees and winners.”

Ian Praed, chief operating o cer at Pepper Money

“New entrants bring increased competition to the second charge mortgage market, and at Pepper we know we've got to continually be at the top of our game to ensure we maintain our position as the market leader. We really appreciate these awards, which are recognition of the ongoing hard work of all of our team in continuing to deliver what we believe is the best proposition in the market.”

Tanya Elmaz, director of intermediary sales at Together

“As the ﬁrst awards dedicated to the second charge mortgage market, the NMAs did a fantastic job of highlighting not only the industry, but the dedicated and hardworking individuals who have worked in this o en under-recognised sector for decades. With the demand for second charge borrowing continuing to grow, it feels only right to celebrate the importance of this specialist product, as well as the industry’s leading brokers and lenders.

Focus on... The North Pole

The North Pole, synonymous with enchanting toy workshops and reindeer-do ed skies, has long captured the imaginations of those near and far.

Once known for its quaint igloos and log cabins, this region now grapples with a whirlwind of economic shi s, political upheavals, and societal trends that are reshaping its icy foundations.

Amid this ﬂurry of developments, The Intermediary returns to for an exclusive deep dive into the trends and tensions deﬁning this magical yet complex market.

Elf-employment

Following revelations of an overtime pay scandal at Santa’s Workshop, which saw several prominent unions, including the National Organisation of Elf Labourers (NOEL), stage mass walk-outs, many elves have le their salaried positions in order to pursue self-employment in areas such as bespoke toy cra ing and festive event planning.

Sandra Claus, founder of North Pole Ho-Ho-Homes, notes: “This shi has been a double-edged candy cane.

“On the one hand, many elves are thriving in their new entrepreneurial roles, but on the other, the transition has made securing mortgages more complex. Thankfully, lenders are beginning to adapt.”

Indeed, Holly-fax and NatWestivity have rolled out self-employed mortgage options tailored to these plucky elves. These products allow for ﬂexible income assessments,

Each month, The Intermediary takes a close-up look at the housing market in a speci c region and speaks to the experts supporting the area to nd out what makes their territory unique

considering both lump-sum seasonal earnings and workshop-side hustles.

Penguin rate rises

At the heart of the North Pole’s housing market lies the Bank of Snowland, run by a frosty but diligent, Monetary Penguin Commi ee (MPC).

This year, the Bank of Snowland raised its Silver Bell Rate by 0.50% to 5.75%, citing inﬂationary pressures from rising Christmas pudding prices and a continued spike in demand for holiday log cabins.

According to current Governor of the Bank of Snowland, Andrew Brrrley, he and his ﬂippered colleagues have endeavoured to keep stability in mind while delivering this latest icy blow.

He says: “As we navigate these frosty ﬁnancial currents, the Bank of Snowland remains commi ed to ensuring stability.

“While interest rates may rise and snowstorms may come, our aim is to keep the North Pole economy as steady as a penguin on ice.

“A er all, we can’t have elves sliding into debt faster than Santa’s sleigh on Christmas Eve.”

However, despite higher rates, brokers like Dasher from Mad Dash 4 Homes remain optimistic, saying: “While the rate hikes have cooled the market slightly, buyers are still keen. It’s just made aﬀordability checks more critical than ever.

“I have urged all my clients to double check they are on the nice list ahead of what could be a diﬃcult few months for the housing market.

“Those with an adverse history of being on the naughty list may ﬁnd themselves struggling to secure funds at present.”

Polar power shifts

This year, the North Pole General Election saw the Polar Worker’s Party (PWP), led by the no-nonsense ReinKeir Star Myrrh, achieve a landslide victory over the long-dominant Frost Party. With a vow to “deliver change down the chimney,” Star Myrrh ran on a bold platform of housing reform, promising to build more than 1.5 billion homes

BY JESSICA O’ CONNOR

under the ambitious ‘Shelf for Every Elf’ initiative.

This festive plan set out several lo y promises, including eco-friendly igloos for ﬁrst-time buyers, candy cane townhouses, and retroﬁ ed log cabins with aurora-powered heating.

In his victory speech, Star Myrrh declared: “Every elf and reindeer deserves a place to call home, and we’ll deliver it – with plenty of holiday cheer!”

Widespread discontent with the incumbent Frost Party’s handling of housing policy fuelled the upset. Rudolph Sleigh-nak, the outgoing Prime Mince-iter, faced backlash for delaying key aﬀordable housing projects like ‘Santa’s Second Workshop’, while focusing heavily on luxury sleigh parking initiatives.

Public outrage reached a boiling point earlier this year when it emerged that Cabinet Mince-iters had a ended a secret party at Polar 10 during an elfwide snowstorm lockdown.

The PWP capitalised on the Frost Party’s failures, vowing to introduce ‘Stocking Savings Schemes’ for deposits, and prioritise aﬀordable housing developments in the underdeveloped iceﬁeld areas.

However, with still no plans to alleviate the all-important Candy Cane Land Tax for ﬁrst-time buyers, questions have been raised as to whether the Party is truly commi ed to solving the housing crisis, or if they’re just skating around the issue.

Elf-sclusive

developments

Among the new developments that have taken the spotlight this year is a high-end community of 100 luxury cabins with heated sleigh garages, bespoke tinsel fencing, and builtin hot cocoa fountains. The gated community has drawn interest far and wide, particularly with international buyers, including a delegation of Arctic foxes. Despite a he y price tag, the development sold out within weeks of launch, underscoring the growing demand for premium housing options.

On the other hand, a more modest housing project aimed at ﬁrst-time buyers has struggled to gain traction. While the cozy, two-bedroom peppermint-themed co ages were designed with aﬀordability in mind, prospective buyers have been deterred by high upfront Candy Cane Land Tax fees.

Dasher has seen this divide exacerbate existing issues in the market, highlighting the region’s widening aﬀordability gap.

He explains: “We need more aﬀordable housing options for elves just starting out. Right now, many are forced to live in rented igloos, o en in poor condition, or stay with family in overcrowded log cabins. It’s not sustainable.”

The issue has drawn a ention from local policymakers, with proposals to introduce lower Candy Cane Land Tax thresholds for ﬁrst-time buyers and an expansion of Shared Sleigh Ownership schemes to reduce costs.

Claus notes: “We need to focus on building homes for all elves, not just those at the top of Santa’s list.”

With pressure mounting, developers are exploring creative solutions, including modular ice homes and cooperative gingerbread villages. Whether these will materialise remains to be seen, but the future of the North Pole housing market depends on bridging this frosty divide.

Chilling rental monopoly

Jack Frost remains an icy overlord of the North Pole’s buy-to-let (BTL) sector, owning nearly all rental properties in the region.

Critics argue his monopolistic practices have driven up rents and discouraged competition.

Adding to this trend, regulatory changes have introduced new environmental standards for rental properties.

Many older igloos, while architecturally charming, require signiﬁcant upgrades to improve insulation and snowpack retention.

“These regulations are a cold blow to the heart of North Pole heritage,” Frost says. “Imposing modern standards on traditional snow-based dwellings is as absurd as asking Santa to ditch his sleigh for an electric scooter.”

He adds: “It’s hard enough to run a business in sub-zero conditions. These new standards will drive good landlords like me out of the market.”

Local tenant advocacy groups have pointed out that Frost Rental Limited’s reluctance to upgrade its igloo stock has le many tenants in freezing conditions.

“The new rules ensure that even in the North Pole, everyone deserves a warm and comfortable home,” says

Holly Winters, chair-elf of the ‘Igloos for All’ campaign. Claus agrees with this view, adding:“Honestly, it’s not like he can’t aﬀord it.”

Meanwhile, young investors, like some entrepreneurial elves, are seizing the opportunity to enter the market with upgraded, regulationcompliant properties.

This may represent a gradual thawing of Frost’s icy grip, though experts predict it will take more than a few eco-friendly igloos to completely reshape the market.

A frosty forecast

One year on from The Intermediary’s last festive adventure, the North Pole’s housing market reﬂects a blend of tradition and transformation, shaped by political reform, evolving buyer priorities, and a rental landscape fraught with tension and ready to be shaken up like a snowglobe.

While progress has been made in key areas – such as tailoring financial products for the newly elf-employed and the emergence of new housing developments, some fi ed with more baubles than others – significant challenges remain.

From sky-high Candy Cane Land Tax burdens to an aﬀordability gap that continues to widen, the path forward is going to take a considerable amount of snow-ploughing before it’s smooth sleigh-ing for all.

Dasher, summing up the year’s complexities, oﬀers a hopeful yet cautious outlook: “The North Pole housing market still has its magic, but what we need now is balance –aﬀordable homes for new buyers and fair rentals for tenants.

“Until then, I’ll keep telling my clients: ‘Stay on the nice list, it might be your best asset!’” ●

On the move...

Shepherds Friendly names Phil Nash CSO

Shepherds Friendly has appointed Phil Nash as chief sales oﬃcer (CSO) to strengthen its intermediary relationships.

Previously, Nash served as sales director at UnderwriteMe, where he helped expand the company's reach in the intermediary market.

He will be responsible for enhancing Shepherds Friendly's market presence and brand recognition among intermediaries.

Nash said: “I’m hugely excited to join Shepherds Friendly, whose ethos of 'making a diﬀerence' strongly

Just Mortgages appoints Ray Rodrigo as sales director

Just Mortgages has appointed Ray Rodrigo as divisional sales director, to focus on growing his team of employed mortgage advisers and supporting Felicity J. Lord branches across London.

He said: “I have plenty of experience to share from across mortgages and estate agency, and I know what it takes to build a successful team."

John Phillips, CEO of Just Mortgages and Spicerhaart, said: “Our employed division continues to be a high-performing part of our business, full of tremendous talent. Adding Ray to the team with his wealth of knowledge and experience is a great result and he will be a valuable resource to our advisers. Plus, his experience in mentoring and recruitment will be important too as Just Mortgages remains the destination for ambitious advisers."

aligns with my values. I look forward to working with the business development team to deliver value and drive success at a time of growth for the society.”

CEO Ann-Marie O’Dea added: "With over 25 years of experience, his expertise and fresh perspective will be a huge asset as we move into our next exciting phase of growth.”

Hinckley & Rugby adds two telephone BDMs to intermediary team

Hinckley & Rugby Building Society (HRBS) has appointed Nina Andrew and Lauren Baylis as telephone business development managers (BDMs).

Andrew and Baylis will serve as the ﬁrst point of contact for brokers, addressing product queries and assisting with applications.

Andrew said: “Hinckley & Rugby Building Society is an organisation that truly values its brokers and takes a tailored approach to lending.

"I look forward to working with the team.”

Leeds Building Society appoints Brendan McCa erty as chair

Leeds Building Society has appointed Brendan McCaﬀerty as chair. He succeeds Iain Cornish.

McCaﬀerty has been a nonexecutive director at Leeds Building Society since September and is a chartered management accountant with experience including across the insurance and pensions sectors.

McCaﬀerty said: “I am honoured to be appointed to the role of chair at Leeds Building Society.

United Trust Bank (UTB) has appointed Eleanor Russell-Blackburn as a BDM to lead the bank’s asset finance broker support in Scotland. RussellBlackburn has experience in SME and commercial finance and the Sco ish asset finance market.

“Joining HRBS

society that has reputation in the industry."

Baylis said: “Joining HRBS is an incredible opportunity to contribute to a society that has such a strong reputation in the industry."

"The society has a strong heritage, a clear purpose, and is commi ed to pu ing members ﬁrst. I look forward to working with the rest of the board, executive team, and colleagues across the society to build on its success and ensure we remain well-positioned to serve our members.”

working with the rest of the board, executive team, the society to build on its we

United Trust Bank adds BDM to lead asset nance sales in Scotland

industries largely underserved by the asset ﬁnance market.

Before joining UTB, she was a senior BDM at Shawbrook Bank. She recently relocated to Scotland, and her role with UTB focuses on further strengthening and developing existing relationships with brokers based in Scotland.

"Eleanor’s experience of working in Scotland with brokers supporting a diverse range of Sco ish SMEs makes her the perfect person to lead our push north of the border.

Nathan Molle , head of asset

for UTB asset ﬁnance with many

Nathan Molle , head of asset finance at UTB, said: “Scotland presents a significant opportunity for UTB asset finance with many well-established and thriving

Russell-Blackburn added: “I am delighted to have joined UTB at a very exciting time in their story and look forward to catching up with broker contacts old and new."

PHIL NASH

NINA ANDREW (L) AND LAUREN BAYLIS (R)

RAY RODRIGO

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