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From the editor...
Anyone with an eye on The Intermediary’s sites and socials –which I assume anyone devoted enough to be reading this, of course, keeps avid track of – will know what I mean when I say that March has been quite the month here at Astor Towers.
Until, at the time of writing, only a few days ago, we couldn’t talk much about what was happening behind the scenes, having to instead keep the swan’s legs kicking furiously beneath the surface while business continued as usual above.
For those not in the loop, I can now reveal that all my crowing from last month about our successes was not, as some might have assumed, just my ego speaking. Or at least, not entirely. In fact, those successes have allowed the business to further expand, taking on a full suite of new publications within the business motoring and automotive finance space.
What relevance does this have to property finance, you might ask. Well, aside from being a chance for us to flex our creative muscles ge ing to grips with a new sector, which is always fun, there are other links, particularly when you consider the increasing focus on holistic advice.
For example, this month’s issue is our incredible well timed Specialist Finance Focus, and one of the key topics we dive into is the need for propositions that address the full gamut of business finance needs experienced by small to medium enterprises (SMEs).
Whether it’s property investment, cashflow, investment funds, invoice finance, or perhaps managing and financing a fleet of vehicles, these needs are myriad and constantly evolving. These businesses also make up an integral part of the UK’s struggling economy, so their concerns are not just their own.
This is where the specialist market comes in, and this month we speak with several lenders that are currently leading the charge in evolving their products and meeting need where it lives, rather than forcing borrowers –individual, landlord, or corporate – to fit into a narrow profile.
Speaking of leading the charge, our feature this month casts an eye to the much-discussed 1.5 million mark set by the Labour Government. While it has been easy to dismiss this as yet another unreachable target, the fact remains that we desperately need housing – not just in terms of quantity, but that fits the nuanced present and future needs of the population.
Rather than take the easy way out, rolling our eyes as Labour wheel the 1.5 million target out in the press once again, our feature takes a practical approach and outlines why the specialist finance market will be key to ge ing anywhere close.
With spring peeking through the clouds and the horizon for 2025 looking, at least tentatively, a li le brighter, there is a lot of change yet to come. ●
Cover illustration by Barbara Prada Cartoons by Giles Pilbrow
by Pensord Press
SPECIALIST FINANCE
FOCUS ISSUE
Feature 6
BUILDING THE FUTURE
Jessica O’Connor asks whether specialist nance can help hit Government targets
Opinion 14
Insights into specialist lending from LendInvest, Together, the BDLA, Market Financial Solutions and more
REGULARS
Broker
Business 72
A look at the practical realities of being a broker, from International Women’s Day to the monthly case clinic
Local focus 82
This month The Intermediary takes a look at the housing market in Stoke-on-Trent
On the move 86
An eye on the revolving doors of the mortgage market: the latest industry job moves
SECTORS AT-A-GLANCE
INTERVIEWS & PROFILES
The Interview 38
QUANTUM MORTGAGES
Jason Neale talks core specialist values and the lender’s expanding proposition
Pro les 28, 70
ALLICA BANK
Michael Mann outline’s the bank’s direction for 2025, and the economic importance of SMEs
LV=
Katherine Carnegie on the importance of investing in the right people and processes to create change in the market
Q&A 20
HAMPSHIRE TRUST BANK
Alex Upton and Andrea Glasgow discuss partnership, women in leadership, and the rise of specialist lending
Brian Kerr on the challenges and opportunities facing business development managers
Building the future
CAN SPECIALIST FINANCE BRING PIPEDREAM TARGETS BACK TO REALITY?
Jessica O’Connor
The Government’s pledge to deliver 1.5 million new homes this Parliamentary term is, to put it mildly, ambitious. With a stubborn planning system, rising construction costs, and a market that does not always behave as policymakers hope, many in the industry are already raising an eyebrow at the feasibility of this target.
While the big-name developers will dominate the headlines, they are not the only ones shaping the UK’s housing future. Beneath the surface, specialist finance lenders are quietly driving progress, providing the tailored funding solutions that mainstream banks are too riskaverse to offer.
From bespoke development loans to funding for modern methods of construction (MMC) and self-build projects, these lenders bridge the gap where traditional finance falls short.
Unlike rigid high street banks, specialist lenders take a pragmatic, project-led approach. This agility is crucial for small to medium (SME) developers, which are often the most innovative, but struggle to secure mainstream funding.
By offering flexible deals, regional expertise, and faster decision-making, specialist finance is not just supporting housebuilding – it is actively enabling it.
Tantalising targets
The mortgage industry has seen its fair share of ambitious housing targets come and go. While the Government may be keen to keep the 1.5 million number in the headlines, industry experts are not convinced that it will translate into bricks and mortar.
Chris Gardner, CEO at Atelier, puts it bluntly: “It is difficult to see how the 1.5m target will be achievable by the end of the current Parliamentary term.”
He holds out some hope that building 300,000 homes per year could eventually be possible, but only if policymakers get out of their own way.
As it stands, the industry is tangled in a web of outdated planning laws, sky-high development costs, and an ever-growing list of regulatory hurdles. The Section 106 and Community Infrastructure Levy (CIL) regimes are particular
sticking points, adding unnecessary costs that ultimately are passed on to homebuyers.
Meanwhile, the planning system remains a notorious bottleneck.
Dan Joyce, deputy managing director at Close Brothers Property Finance, highlights the latest figures from The Home Builders Federation’s latest ‘Housing Pipeline Report’, pointing out that “just over 230,000 units were granted planning permission in the last year – the lowest in a decade.”
Joyce adds: “Planning is the stage where projects become stuck. Housebuilders are working hard, they’ve got their finance in place, but they come up against delays over which they have no control.”
The reality is that, without a drastic rethink on planning reform, infrastructure investment, and development incentives, these ambitious targets will remain ambitious.
As Neal Moy, managing director of Paragon Development Finance, puts it: “I would like to believe that the 1.5 million homes target is achievable; however, the Government will need to relax planning laws further and encourage developers and councils to get building as soon as possible.”
Amid all this red tape, specialist finance is stepping up where traditional lenders have fallen short.
Unlike mainstream banks, which often have to take a ‘one-size-fits-all’ approach, specialist lenders tailor their funding to individual projects, looking beyond rigid tick-box assessments.
Tanya Elmaz, head of intermediary sales at Together, stresses that this flexible approach is key to getting homes built, as many housebuilders struggle to access capital through conventional means.
“Specialist lenders like Together take a bespoke look at every case brought before them and look to support housebuilders wherever possible,” she explains.
According to Neil Leitch, managing director of development finance at Hampshire Trust Bank: “The Government can set whatever target it likes, but if there’s no real plan to support the people building the homes, it’s just a number on a press release. We’ve heard this before – big housing targets, big promises, and not enough being done to make them a reality.”
While large housebuilders will, of course, play a role, the market needs greater financial backing for a broader range of developers.
Leitch adds: “Specialist finance is critical because we look at a project for what it is, not just how neatly it fits into a bank’s risk model. If a scheme is viable, run by an experienced developer,
and has a clear plan to get built, we’ll find a way to fund it. That’s the difference.”
Small but significant
If the Government’s 1.5 million homes target is to become reality, then SME developers must be given the support they need to deliver. While large housebuilders often steal the spotlight, it is these smaller players that bring agility, creativity, and local expertise to the table.
Wayne Douglas, CEO at SME developer City & Country, says: “SMEs play a crucial part of the housebuilding fabric in this country.”
These firms can take on smaller, more complex sites that big developers overlook, and create “more bespoke development that is a more attractive proposition to its surroundings,” ensuring better placemaking and design, he adds.
However, SMEs continue to face significant barriers – from planning delays and tax burdens to one of the biggest hurdles of all: access to finance.
Steve Turner, executive director of The Home Builders Federation, warns that “the growing tax burden on new homes is now making development in large areas simply not viable.”
He highlights the impact of the Building Safety Levy, which will see SMEs – many of whom “have never built anything higher than a family house” – paying thousands per home to cover the cost of remediating high-rise buildings built by other parties.
Meanwhile, rising interest rates have made securing development finance even harder, with 60% of SMEs identifying it as a barrier in the most recent State of Play report by The Home Builders Federation, Close Brothers Property Finance and Travis Perkins.
While mainstream banks remain reluctant to back smaller developers, specialist finance is stepping up. Yann Murciano, CEO at BLEND, notes: “Mainstream banks have become increasingly risk-averse, often focusing on larger housebuilders with established track records and significant capital reserves. This has left many SME developers struggling to secure the funding they need to bring their projects to life.”
Unlike traditional lenders, specialist finance providers take a more flexible, project-focused approach.
“We assess the viability of a scheme based on its merits rather than applying rigid lending criteria,” Murciano explains. “This means we can support smaller developers working on newbuild projects, conversions, and refurbishments – especially in areas where there is strong local demand for housing.”
Elmaz echoes this sentiment, stressing that
“SMEs need better access to finance, which they simply aren’t getting from mainstream banks.”
Specialist lenders, she explains, can fill this gap by offering tailored funding solutions, lowervalue development loans, and structured finance for residential-led schemes.
This shift is not just benefiting SMEs –it is redefining the market. Gardner says: “Developers are spoilt for choice for specialist lenders, and it means that pricing is competitive and commercial terms are attractive.”
Beyond just competitive rates, specialist lenders bring regional knowledge and bootson-the-ground expertise, helping developers navigate local challenges while structuring deals that withstand rising costs and sector volatility.
Gardner adds: “Specialist lenders also have unique expertise in structuring deals to cope financially with the current sector challenges that are driving up costs and delays.
“There is significant competition in the lender market, in fact, there has never been a better time to be a developer looking for finance. The market has a lender for everyone, and plenty of consumer choice.”
Bringing bespoke options
Traditional banks often prioritise large, low-risk loans to corporate housebuilders, leaving SME developers scrambling for alternative funding.
Leitch says: “Mainstream lenders look at a balance sheet and make their decision. That works for a large housebuilder, but an SME project is far more nuanced. In specialist finance, we don’t just fund developments – we live and breathe them alongside the developer.”
Specialist lenders are more likely to offer tailored financial solutions that reflect the realworld challenges of small-scale development.
Murciano says: “SME housebuilders rely on a range of specialist funding solutions that provide the certainty of funding often lacking in traditional bank lending.”
These solutions include development finance, which covers upfront construction costs and allows for staged drawdowns as the project progresses, ensuring developers are not burdened with large interest payments before they even break ground.
"Let's come back in a year and see how Keir's ambitious plans to build 1.5m new homes is going" p
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FFINTECH: FUELLING SPECIALIST LENDING
He says: “Mezzanine funding bridges the gap between senior debt and equity, enabling SME housebuilders to take on larger or multiple projects.”
Andrew Lloyd, CEO of Fignum
intech is rapidly transforming specialist nance, making lending more e cient and accessible for both borrowers and lenders. Digital solutions are replacing manual processes, leveraging Open Banking for expense analysis, arti cial intelligence (AI) and machine learning for document validation, and third-party data sources like Experian to reduce unnecessary data entry. These advancements mean that borrowers can now receive near-instant insights into which lenders align with their speci c circumstances and a lender’s risk appetite. This shift not only improves access to funding but also signi cantly reduces uncertainty in the borrowing process.
For SME developers, access to funding has traditionally been a challenge, primarily due to two key factors: limited visibility on which lenders would nance their projects and the high operational costs of manual underwriting for smaller loan sizes.
Fintech-driven specialist nance solutions are addressing both issues by increasing transparency, enabling earlier insight into lending decisions, and streamlining underwriting and o er journeys. By making these lending processes more e cient and economically viable, technology is unlocking new opportunities for SME developers—helping them play a greater role in reaching the Government’s 1.5 million homes target.
Other options include development exit finance, which provides a crucial bridge between project completion and final sales, enabling developers to reduce borrowing costs and bridging loans, which offer quick access to capital, allowing SME developers to seize timely opportunities – whether that’s acquiring land, securing planning permission, or covering unexpected costs. For those needing an extra financial boost, Murciano also points to mezzanine finance, which fills the gap between senior debt and equity. This is particularly useful for SME developers who may not have the upfront capital to take on larger projects.
It is not just about the products themselves – but also speed and expertise, allowing for an agile approach and the ability to adapt lending structures to a specific product. Leitch says: “Delays kill deals – SME developers don’t have time to wait for a credit committee that meets once a month.”
Joyce highlights the importance of being hands-on: “At Close Brothers, we stay close to each and every borrower we lend to, knowing their businesses and projects inside out.”
This personalised approach enables lenders to provide fully funded development loan facilities and even revolving development finance, ensuring developers have a steady cash flow to pay contractors, suppliers, and associated costs without the typical bottlenecks of mainstream lending.
As the market evolves, so too does the demand for more flexible funding structures. Moy notes that developers are increasingly looking beyond traditional housebuilding, with rising interest in Build-to-Rent (BTR), Purpose-Built Student Accommodation (PBSA), and even mixed-use schemes incorporating commercial elements.
Sustainability is also shaping financing trends, with lenders stepping up to offer targeted funding.
“If developers sign up to our Green Homes Initiative and achieve an EPC rating of A on 80% of their scheme, we offer them a 50% reduction in their exit fees,” Moy explains. “Going forward, I see specialist finance evolving to support even more SME housebuilders, whether that’s different types of properties or supporting different types of developers.”
Supporting self-builds
Specialist finance’s role in driving housing delivery also stretches to enabling all types of bespoke housing projects, including self-builds. While SME developers bring much-needed housing supply by tackling overlooked plots, selfbuilders contribute in their own way, creating unique homes that cater to individual needs while still feeding into broader housing targets.
Though self-builds may seem like a drop in the ocean compared to large-scale developments, every little helps in the push to balance out demand and supply. They represent a vital opportunity for many homeowners and, by extension, the UK’s overall housing supply.
However, one of the biggest barriers to selfbuild growth is a lack of awareness around p
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"We used a very small developer"
Sometimes work doesn’t go as intended, and properties aren’t fully completed.
“It’s an area that needs manual underwriting and understanding, as the individual builds, renovations, and conversions are all so different. It needs experienced, skilled underwriters, product and policy teams, and expert valuers.”
Embracing modernity
While self-builds are carving out a space in the housing market, Modern Methods of Construction (MMCs) are redefining how homes are built altogether. Faster, greener, and less reliant on traditional labour, MMCs have the potential to supercharge the UK’s housing delivery – but only if the finance industry is willing to evolve alongside it.
Traditional lenders, ever the cautious gatekeepers, remain wary of MMC’s long-term durability and resale potential, leaving a critical funding gap. Fortunately, specialist lenders are proving they have the expertise and flexibility to finance innovation where others hesitate.
“There has been an increase in demand for these types of properties,” says Grimshaw. “We’ve certainly seen more cases coming to us where the borrower has such builds in mind.”
financing. Charlotte Grimshaw, head of intermediaries at Suffolk Building Society, highlights a worrying knowledge gap, noting that “our own research found that two-thirds of potential self-builders didn’t know that some mortgage lenders will allow them to borrow to purchase land where planning permission has been granted.”
Many mistakenly assume they must buy land outright with cash or rely on family-owned plots, when in reality, specialist finance offers tailored solutions to make self-build projects viable.
In fact, it is the flexibility and adaptable nature afforded to borrowers by specialist lenders that can in turn cater to a variety of self-build projects, accounting for even the most niche of property requirements.
“We’ve recently allowed multi-plots,” Grimshaw notes. “Properties adjacent to a borrower’s existing home can now be considered, and we’ll also allow applications with outline planning permission, with full permission required before completion.”
Due to their complex and often changeable nature, self-build loans require ongoing and hands-on lender involvement, ensuring that projects stay on track and reach completion. Grimshaw says: “No case is ever the same.
However, while borrower appetite is growing, funding remains a challenge. Grimshaw says: “The issue for lenders is a lack of evidence of the longevity of these methods – particularly with our British weather! Valuers will consider the saleability of the self-build property in the future and make their lending recommendations accordingly.”
Caution from traditional lenders is one of the key barriers holding the MMC market back.
David Johnson of The Modern Builder explains: “MMC has the potential to play a crucial role in meeting the UK Government’s target of delivering 1.5 million homes by 2030.”
The advantages are clear, he adds: “Many elements are prefabricated offsite, reducing onsite build times by up to 50%.
"This allows homes to be completed faster and with less disruption.”
MMCs are also more sustainable, with less material waste and better thermal performance, which translates to lower energy bills and reduced carbon footprints.
Johnson says: “With the ongoing shortage of skilled construction workers, MMC reduces reliance on traditional trades, as much of the construction is automated or carried out in controlled factory environments.”
Despite the benefits, high street banks are still proving slow to adapt in many instances, favouring traditional brick-and-mortar builds
due to well-established valuation methodologies that fit better with their funding structures and processes.
Specialist lenders are stepping in, offering tailored financial products that reflect the real-world viability of MMCs. Many now provide self-build and development mortgages specifically designed for modular and offsite construction, featuring staged payments, interest-only periods, and higher loan-to-values (LTVs) for energyefficient homes.
Grimshaw highlights the importance of rewarding sustainability, adding: “We financially incentivise those who are aiming for the highest EPC rates, with reduced follow-on interest rates.”
Government-backed initiatives, such as Help to Build and Homes England’s MMC support, are also helping to ease the financial burden, particularly for SME developers and self-builders who have been among the earliest adopters.
Johnson says: “While large housebuilders and institutional investors were the early adopters of MMC, the sector is evolving, and SME developers are increasingly exploring its benefits.”
Bridging the gap
While the road to 1.5 million homes is paved with challenges, specialist finance is undoubtedly driving Britain’s housing future. By offering agility, expertise, and bespoke financial solutions that traditional lenders often cannot match, specialist finance is not only unlocking opportunities for self-builders, SME developers, and MMC projects but actively accelerating housing delivery.
If the Government is serious about hitting its housing targets, ensuring that SMEs have access to tailored funding is non-negotiable.
Douglas says: “Housing is at the top of the agenda for the Government, so it is going to require an all-hands-on deck approach to achieve the level of new homes needed in this country. This cannot and should not be delivered by major housebuilders alone.”
Ultimately, specialist finance is more than a funding source – it acts as a catalyst for progress, ensuring that viable projects do not stall, and SME developers have the capital to build.
With regulations tightening and planning requirements evolving, the role of flexible lenders is more crucial than ever.
Leitch concludes: “Developers who don’t adapt will be left behind. The lenders that understand this and can support developers through that transition – without overcomplicating things –will be the ones who stay relevant.” ●
HOUSING DELIVERY
In Numbers
◆ The number of residential units approved declined by 2% in Q4 2024 compared to the previous year, while the number of housing projects approved decreased by 10%.
◆ The number of private sector units approved fell by 3% in 2024.
◆ Residential unit approvals rose by 15%, reaching 77,284 units.
◆ The number of housing projects approved increased by 4%, totalling 2,663 projects.
◆ Units in schemes of 10 or more units rose by 16% to 71,857, while private sector housing projects saw a slight decrease of 1%, with 1,718 projects approved.
◆ Private sector units approved increased by 17%, reaching 68,357 units.
◆ Regionally: the North East saw the largest increase in approvals, up 177%, followed by the West Midlands (134%), Yorkshire & Humber (79%). Other regions with strong growth included the East of England (59%), South East (21%), and Wales (24%). In contrast, the North West saw a 42% decrease, while approvals in Scotland and London fell by 4% and 12%, respectively.
Source: Q4 2024 Housing Pipeline Report
£10bn and climbing – the ongoing rise of bridging
Bridging lending has reached new milestones, with the latest data from the Bridging & Development Lenders Association (BDLA) showing recordbreaking volumes in the final quarter of 2024.
The BDLA’s data revealed that bridging completions surged to an unprecedented £2.30bn, representing a 28.6% increase from the previous quarter and a 36.4% rise year-on-year.
More significantly, total bridging loan books have now exceeded £10bn for the first time, demonstrating the sector’s continued ability to support growing borrower demand.
This remarkable trajectory is a direct result of the speed and flexibility that bridging finance offers – both important during a period of change.
Bridging provides finance to bridge a transitional period of uncertainty. We can all agree that there’s a great deal of uncertainty in the economy and the world in general at the moment. More people are turning to bridging when it makes sense to fund their objectives.
Property investors are using it to complete time-sensitive transactions, developers to fund refurbishment projects, and homeowners to secure chain-saving solutions. Increasing confidence in the market is further reflected in a 3.9% quarterly rise in applications, totalling £11.30bn.
As demand grows, so too does the BDLA’s role in supporting lenders, brokers, and borrowers.
Growth and compliance
As a trade association, our role is not only to promote growth in the market, but protect the interests of our members. Fraud is an ever-evolving
threat that can cause significant financial and reputational harm to lenders and borrowers alike, and we have made tackling it a key priority for 2025.
We are now working on the development of an ‘early warning’ fraud intelligence-sharing system tailored to the short-term lending market. This is aimed at helping lenders identify fraudulent applications before they progress to formal application and underwriting. Importantly, this system will comply with all data protection regulations to ensure secure information sharing.
BDLA members already benefit from access to established fraud detection tools such as National Hunter, SIRA, Synectics and NIVO, but we are keen to explore partnerships and technologies to deliver red-flag indicators that lenders can use to identify fraudulent activity in its early stages.
Regulation remains another key area of engagement, and we continue to work closely with policymakers at HM Treasury and the Financial Conduct Authority (FCA) to ensure that bridging lenders are fairly represented in regulatory discussions.
While appropriate oversight is welcomed to promote stability and transparency, proposals such as the Financial Conduct Authority’s (FCA) CP 24/2 consultation, which suggests publicly naming firms under investigation before any wrongdoing is proven, are being actively challenged. Such an approach could lead to significant reputational damage for businesses, even if no misconduct is ultimately found.
We, like others, worry about the ’no smoke without fire’ adage. The BDLA continues to advocate for a regulatory framework that protects borrowers
VIC JANNELS is CEO at the BDLA
while enabling the sector to thrive without unnecessary barriers.
One of the ways we have supported higher standards alongside growing volumes in the market is, of course, the Certified Practitioner in Specialist Property Finance (CPSP) qualification, launched in 2023. CPSP has rapidly gained traction, and has now reached 1,000 registrations, with nearly 400 individuals having successfully gained accreditation. Specialist property finance professionals are embracing the value of structured education, and we expect the number studying and passing CPSP will continue to grow.
The bridging sector has never been stronger, and the BDLA remains commi ed to ensuring its continued evolution in a way that benefits lenders, brokers, and borrowers alike.
The outlook for 2025 is incredibly positive, and we anticipate continued growth in lending volumes, driven by demand for development finance, refurbishment projects, and investment in property conversions. Additionally, we expect the trend of institutional investment in bridging finance to continue, further strengthening the industry.
Collaboration will be crucial, whether it is tackling fraud, shaping fair regulatory policies, or driving professional development.
The record-breaking data from Q4 2024 is not just a reflection of past success, but testament to the opportunities ahead. We will continue to champion the interests of the bridging sector, ensuring that it remains a thriving and trusted market for years to come. ●
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Council Tax continue to put a strain on household budgets.
Is 2025 the year of T
he mortgage landscape is shi ing, and 2025 is shaping up to be a significant year for remortgaging. Simply put, a remortgage is replacing the existing mortgage with a new one, and several different factors prompt homeowners to reconsider their current mortgage positions.
During the pandemic, many homeowners secured fixed-rate mortgages. These terms, o en 5-year deals, will begin to expire in 2025, forcing homeowners to seek new arrangements.
Interest rates have risen considerably since then. In 2021, the average mortgage rate in the UK was at 2.96%. Even with the recent Bank of England interest rate cut, there is still a substantial difference between today’s rate and those in the prepandemic era.
This increase means many homeowners will face much higher rates when their fixed terms end. This rate difference will be particularly acute for those coming off 5-year terms. Conversely, those coming off 2-year terms now may see new rates that are lower. This contrast could change the dynamic of locking in for longer terms.
Economic factors
The higher interest rates compared to five years ago is not the only economic factor that is contributing to the expected remortgage boom.
The latest UK GDP figures paint a picture of remaining uncertainty, slow growth of 0.8% – compared to the US’ growth of 2.8% – shows that the UK’s recovery remains sluggish at best.
Given these economic factors, it’s certain that homeowners are considering remortgage for a number of reasons, three of which are:
Stability: Homeowners would like to lock in a new deal to give clarity and confidence on what their mortgage costs will be over the next few years.
Reduce costs: A remortgage may move a homeowner to a lower interest deal which will reduce their monthly housing expenditures.
Access equity: Some homeowners will consider a remortgage to take some capital out of their property to fund.
Shifting demographics
In 2025, the UK housing market is expected to impact the remortgage proposition. As the lack of new housing and the potential stagnation or decreasing of home prices remain, some homeowners may consider remortgaging sooner to secure favourable deals.
While technically the UK isn’t in a recession, many homeowners are still confronting the cost-ofliving crisis.
Inflation rising to 3% and the constant rise in household expenses like the costs of food, energy and water along with rising
Beyond market conditions, demographic trends and evolving homeowner behaviours are also key factors in the projected 2025 remortgage surge.
An ageing population may seek to remortgage to manage payments as they approach retirement, or to access funds for retirement needs. Simultaneously, younger generations entering the housing market may face financial challenges, leading them to remortgage for be er terms.
There’s also a growing emphasis on financial flexibility, with many homeowners opting
SOPHIE KETTLE is commercial director at LendInvest
to remortgage to handle unexpected expenses or to unlock equity for other investment opportunities.
Finding the right lender
All these combined factors suggest that 2025 will likely see a surge in remortgaging in the UK, and homeowners and intermediaries may be considering which the best lender for them will be. For many, it may no longer be the high street banks.
If there are any lessons to learn from the past few years, circumstances can change through no fault of their own, and they may no longer fit the criteria of high street lenders.
Unlike banks, which are constrained by risks, building societies and alternative lenders like LendInvest could be the right options for homeowners
the remortgage?
looking to remortgage their homes. Alternative lenders may have more flexible lending criteria than the High Street, which can be helpful for borrowers with unique financial circumstances. LendInvest specifically supports this type of borrower including the self-employed, key workers, and those with the occasional blip on their credit history.
Additionally, alternative lenders are more willing to finance in situations where traditional banks may be more hesitant. They also offer flexible terms and a clear exit strategy to ensure affordability for the borrower.
While certain aspects of the high street mortgage are inaccessible, alternative lenders offer bespoke support throughout the process,
including direct contact with underwriters – LendInvest included.
As the world evolves, alternative lenders like LendInvest are also evolving by offering more innovative lending solutions, o entimes delivered through cu ing-edge technology. A platform like LendInvest’s Mortgages Portal can simplify the residential mortgage journey for brokers through fast and credit-backed decisions in principle (DIPs), streamlined verification processes and real-time case updates.
The combination of technology, innovative products and access to expert support can set alternative lenders apart from the high street, allowing brokers to support their clients looking to remortgage their
home regardless of their situation. As spring begins, it’s still too early to tell if 2025 is the year of the remortgage, but those who embrace an alternative landscape stand the best opportunity to thrive. ●
Are we missing an opportunity?
The UK economy is driven by the selfemployed; and whether it’s company directors or gig economy workers, their number has exploded. However, they are consistently being let down in their property-owning ambitions.
Statistics show that there are around 4.4 million of these workers in the UK. The pandemic saw deliveries and online gig work increase by 7%, and around 1.37 million workers were added to the UK gig economy from 2019 to the end of 2021. In addition, a study conducted by Together last year found that self-employed mortgage applicants are set to rise by 67% over the next five years – from £20.9bn in 2023 to £34.8bn.
Disposable income
We conducted further research this year that found this cohort is si ing on nearly £82bn of disposable income, which could fund the average first-time buyer deposit 1.6 million times over.
Despite this, four in five of these entrepreneurs have struggled to get a mortgage. When asked why they had been rejected, being unable to prove a steady, monthly income was cited as a key reason. 83% of those who work for themselves say the mainstream’s current mortgage lending criteria is pi ed against them, and 87% are even prepared to take on extra work to prove their income on paper.
This is having an impact on their goals, too; many of them put on hold important life plans such as marrying, having children or expanding their businesses – potentially hi ing future earning potential – to get on or step up the housing ladder.
This is hugely disappointing considering that these individuals o en demonstrate the entrepreneurial spirit the UK desperately needs. At a time when the global economy is so
unstable, they shouldn’t have to face additional challenges when looking to achieve their property ambitions.
Unfortunately, the problems o en arise from lenders taking a ‘one-sizefits-all’ approach to applications. Self-employed borrowers tend to have fluctuating income levels, multiple sources of income or be unable to provide the necessary evidence of income that mainstream banks demand in their lending criteria, and so when they face an automated system they are o en rejected.
For brokers, however, this presents an opportunity. There is clearly a huge demand from self-employed borrowers, so being able to serve this group can give you a real competitive advantage.
In our study, nearly one in 10 who were rejected for a mortgage felt that not being able to speak to an adviser who understood their circumstances was one of their biggest challenges. Nearly three quarters of them told us they don’t think there are enough products on the market to meet their needs or situation, and almost a third who have applied for a mortgage in the past found it a challenge to actually
MAEVE WARD is head of intermediary sales at Together
find a lender that can support their application.
In addition, a third of respondents in our research said that greater flexibility on mortgage repayments – including the ability to overpay or underpay – would improve their mortgage application experience.
There are options out there for the self-employed, brokers just need to know how to access the specialist lending market to best serve these customers otherwise let down by the mainstream banks’ rigid lending criteria.
Holistic view
There is a lot to be said for the human underwriting approach adopted by specialist lenders; it allows lending decisions to be made based on a holistic view of the borrower’s overall circumstances, rather than being driven by algorithms and a ‘computer says yes or no’ approach.
We expect that the number of selfemployed will continue upward, and with so much economic turbulence, mainstream lenders’ criteria may become more stringent. This cohort will be looking for brokers who are able to understand their needs, so taking the time to learn about the options available in the specialist market will help you stand out from competitors.
Keeping yourself educated and up to date with the latest product innovations and industry changes is a must.
Brokers who can help customers with their ever-diversifying needs, and find solutions for self-employed customers, will definitely stand out from the crowd. ●
Landlords positive, but uncertainties loom large
Interest rates are falling, rental prices remain on an upward trajectory, and house prices continue to grow, instilling a sense of optimism among landlords. However, the new tax year is just around the corner, and it promises to bring fresh complexities. Meanwhile, the broader economic outlook remains uncertain, and tenant affordability remains a concern. How are landlords navigating these competing forces? Market Financial Solutions commissioned a survey of 300 UK landlords to gauge their confidence, investment plans, and key concerns in the lead-up to the 2025-26 tax tear.
Con
dence in the market
Despite various headwinds, landlords remain largely optimistic.
The survey revealed that 36% are planning to expand their portfolios this year, compared to just 9% who intend to reduce the number of properties they own. This indicates that the strong end to 2024 – when a Royal Institution of Chartered Surveyors (RICS) survey suggested the market finished the year on “firm footing” – has created a more positive investment environment in the first few months of 2025.
This is supported by recent research from Simply Business, which revealed that London saw a 13% rise in the number of new landlords between 2023 and 2024. Similar growth was felt in Birmingham (12%), Leeds (11%) and Manchester (10%), contradicting the o en-negative media narrative surrounding the buy-to-let (BTL) sector and highlighting that investors remain confident in the long-term viability of the BTL sector.
A key factor driving this optimism is the expectation that property prices
will continue to rise. More than half (54%) of the landlords said they anticipate average house price will increase over the next 12 months, while 39% believe values will remain stable. Nationwide’s latest house price index showed a 3.9% rise in average prices over the past year.
However, while 43% of landlords expect rental yields to improve in 2025, this figure indicates that some uncertainty remains. Since stronger rental yields are closely tied to lower borrowing costs, it appears that many landlords are waiting for more substantial rate cuts before expressing greater confidence in their investment outlook.
However, recent rental yield data paints a brighter picture. Indeed, average yields reached 6.93% in Q4 last year, which represents a 13-year high. What’s more, yields have felt sustained growth year-on-year since 2022. There are clearly factors that are tempering landlord confidence.
Key challenges in play
In fact, Market Financial Solutions’ data suggests that there are three primary concerns that landlords believe will impact their portfolios in the coming months. The first major concern is tenants’ ability to keep up with rental payments. Two in five (41%) landlords cited this as a significant risk, which may explain why 61% opted to keep rents unchanged in 2024 and why less than half (47%) plan to raise them in 2025. Connected to this is the fact that 35% of landlords expressed concerns about domestic economic instability. A similar number (28%) pointed to global economic instability as a key risk, which highlights the broader uncertainties that are influencing landlord confidence.
PARESH RAJA is CEO at Market Financial Solutions
The long-term impact of these trends remains uncertain, but if inflation stays close to the Bank of England’s 2% target and further rate cuts support economic growth, these concerns could ease over time. That said, worries about Government intervention in the property sector are also widespread. For example, 65% of our landlords either ‘somewhat agreed’ or ‘strongly agreed’ that ‘the policies announced in the autumn Budget will have a negative impact on their property investments’, while 64% have decided to pause on making new property investments due to concerns around incoming regulatory and tax changes. This is understandable, given the wave of reforms on the horizon, the Renters’ Reform Bill, further clarity on energy efficiency requirements expected later this year, and from April, rising Stamp Duty costs.
We anticipate a growing number of landlords seeking guidance on managing their tax and regulatory obligations in the lead-up to the new tax year on 6th April.
Specialists step up
It’s important that lenders and brokers alike monitor and adapt to these trends. Offering products that provide flexibility and certainty will be key for landlords navigating market shi s, while ensuring that they are abreast of legislative changes will empower them to make be er-informed decisions about their portfolios.
If the specialist lending sector exhibits these qualities and rises to meet these challenges, there’s every reason to believe the BTL market will continue to thrive in the coming year. ●
Hampshire Trust Bank Q&A
The Intermediary speaks with Alex Upton, managing director of specialist mortgages and bridging, and Andrea Glasgow, sales director of specialist mortgages at Hampshire Trust Bank (HTB), about partnership, women in leadership, and the rise of specialist lending
How has the perception of specialist lending changed over the past decade?
Andrea Glasgow (AG): 10 years ago, specialist lending wasn’t always viewed positively, and bridging in particular was often seen as a last resort. But those of us in the industry knew its potential, and it’s been incredible to see that shift.
Today, bridging is recognised as a powerful tool that helps brokers and their clients move quickly and strategically. The professionalisation of the market – with tighter regulation, greater transparency, and a real focus on adding value –has been key to that change. That’s something HTB has always championed: making sure brokers have the right solutions at the right time.
Alex Upton (AU): The rise in complex cases has driven demand for specialist expertise. Brokers are now managing portfolios with houses in multiple occupation (HMOs), multi-unit freehold blocks (MUFBs), and semi-commercial properties, and they need lenders that can navigate that complexity.
What’s remained constant, though, is the need for lenders to be adaptable and broker focused. HTB thrives on complexity – that’s where we stand out, delivering tailored solutions that others might shy away from. Specialist lending isn’t about obstacles; it’s about opportunities. It’s also about a shift in mindset – brokers now recognise that specialist lending isn’t just an alternative, in many cases, it’s the best-fit solution.
AG: It’s not just about the properties themselves – it’s also about the people behind them. Today’s borrowers have increasingly complex financial situations, from self-employed individuals with multiple income streams to portfolio landlords
looking to optimise their assets. The industry has evolved to cater for this demand, and specialist lending is leading the way in providing solutions tailored to real-world needs.
How has the growing presence of women in leadership influenced the industry?
AU: Representation matters. Having women in leadership creates a more inclusive and dynamic industry. One of the things I’m most proud of at HTB is the mentoring culture we’ve built, supporting each other internally and ensuring brokers feel that same sense of partnership. Their success is our success.
But there’s still more work to do. We need to continue fostering an environment where women can see a future for themselves in financial services, not just in supporting roles, but leading from the front.
AG: Seeing more women step into senior roles has been fantastic, but there’s still plenty of ground to cover. It’s not just about representation; it’s about ensuring diverse voices drive real change.
At HTB, collaboration is at the heart of what we do, and that extends to how we work with brokers. Having different perspectives leads to better decision-making and stronger outcomes.
I also think that having more women in leadership has reshaped conversations around work-life balance, career progression, and the importance of inclusive leadership – things that benefit everyone in the industry.
AU: It’s about creating pathways, not just opportunities. One of the most rewarding aspects of leadership is seeing talent develop and helping people grow into their roles. The industry is
shifting, and I’m excited to see what the next generation of leaders will bring.
How has the balance between technology and the human
touch evolved?
AU: Technology is a fantastic enabler, but the human touch is irreplaceable. Brokers deal with complex, time-sensitive scenarios, and they need a lender they can trust to pick up the phone and make things happen.
That’s why accessibility isn’t just about speed, it’s about confidence. Brokers don’t have to schedule calls or jump through hoops to get answers. Access is part of the deal. But at the same time, technology is vital – it should streamline processes and remove unnecessary friction.
Partnership is at the heart of everything HTB stands for.
AG: It’s not always a bed of roses, but that’s what makes it interesting! We challenge each other to be better every day, and that drive keeps us moving forward.
It’s about trust, respect, and staying focused on making a real difference for our brokers and their clients. Alex is incredibly clear on what she wants, and we both set the bar high to ensure we keep pushing forward, delivering results, and building what I believe is the best team in the business.
What
trends will shape the next decade, and what role will HTB be looking to play?
Technology has improved efficiency, real people – underwriters who understand
AG: Technology has improved efficiency, particularly with tools like automated valuation models (AVMs), but brokers want to speak to real people – underwriters who understand their cases and can offer practical solutions. That direct access is a cornerstone of what we do.
The challenge for lenders
The challenge for lenders is getting the balance right – using technology to enhance service while ensuring that personal relationships remain at the heart of lending decisions.
service while ensuring that personal
The market’s only going to get more complex, and brokers need lenders that don’t just react, but stay ahead of the curve. We’re already seeing brokers supporting clients expanding into HMOs or semi-commercial properties. That demand for specialist expertise is only going to grow, and we’re here to help them navigate it. We also anticipate further regulatory shifts, so lenders who can provide clarity and certainty will be highly valued.
What makes your partnership so eff ective, and what can others learn from it?
AU: We complement each other’s strengths, and that balance has been key. It’s also about communication – being honest, supportive, and always focused on solutions. That’s exactly the relationship we build with brokers, making sure they have confidence that we’ll deliver when it counts.
ANDREA GLASGOW
have confidence that highly valued. especially as regulation evolves and client
AU: Collaboration between brokers and lenders will become even more crucial, especially as regulation evolves and client expectations grow. HTB’s role will be to continue leading the way – not just responding to change but staying ahead of it. We’ve always been a lender that brokers can count on to adapt, move fast, and deliver solutions when it matters.
The next decade is full of opportunity, and we’re ready to embrace it. The specialist lending market is resilient, and I firmly believe we’ll continue to see innovation drive better outcomes for brokers and ●
a lender that brokers can count to embrace it. The specialist lending market is resilient, continue better outcomes for brokers and their clients.
ALEX UPTON
Brokers need buy-to-let options
Expectations of another rate cut were met in early February, when the Bank of England’s Monetary Policy Commi ee (MPC) voted by a majority of seven to two to reduce the base rate to 4.5%. The two who voted against did so because they wanted to go further and cut the base rate down to 4.25%.
A slew of lenders moved to cut their own rates in the days that followed, with Nationwide, Barclays and Santander launching competitive low loan-to-value (LTV) deals under 4%.
An estimated 1.8 million fixed rate mortgages are set to mature in 2025, according to UK Finance, of which around 800,000 are set to come off rates under 3%.
Overlooked
In a year when refinancing will be crucial for so many borrowers, it’s easy to overlook landlords, but they’re facing stronger headwinds than most.
2023 saw the size of the buy-to-let (BTL) market shrink for the first time, with the number of new mortgage loans being granted falling from 25,280 in Q4 2022 to 12,422 in Q1 2024, according to UK Finance figures.
2024 has been more resilient, with house purchase lending to landlords up 13% to £10bn. Overall, gross buy-to-let lending last year rose, from £30.2bn in 2023 to a projected £33.2bn in 2024. As in the residential sector, this growth was in response to the lowering of new mortgage rates through the year.
Borrowing is likely to see a modest uptick in activity in 2025 following February’s rate cut, with landlords having more flexibility to rebalance their portfolios’ LTVs thanks to be er affordability. This will also trigger some to sell, and others to expand their portfolios.
There is further evidence that the transition of the market overall from
privately held buy-to-lets to limited company ownership is still underway, affecting lending pa erns.
According to data from the Intermediary Mortgage Lenders Association (IMLA), the number of outstanding BTL mortgages fell by 31,500 in the nine months to September 2024. IMLA suggests that there is anecdotal evidence from estate agents showing a rise in the number of landlords selling, especially among non-portfolio landlords with a small number of properties in their own names.
The make-up of borrowers in the market may be changing, but this just presents intermediaries with the opportunity to be of immense value to landlord clients.
This year, UK Finance has warned that conditions look challenging. The Stamp Duty surcharge for landlords rising from 3% to 5% immediately a er the Chancellor Rachel Reeves’ autumn Budget has put additional cost into purchases.
The lender trade body expects that change to dampen buy-to-let purchase activity, bringing it down by 7% to £9bn in 2025.
Nevertheless, landlords themselves are ‘cautiously optimistic’ that gross buy-to-let lending in 2025 will be higher than the forecasted amount of £32bn in 2025, according to the National Residential Landlords Association (NRLA).
Remortgage and PT
In 2023, there was a greater proportion of product transfers undertaken; of those product transfers, the majority of landlords selected a 2-year product. These 2-year product terms will come to an end throughout 2025, and those landlords will be looking to reassess their options.
Remortgage activity in the buyto-let sector is likely to be more resilient, but landlords increasingly need specialist advice to navigate
ROB MCCOY is senior product and business manager at TMA
refinancing in a market that is already dealing with regulatory and taxation challenges.
UK Finance figures show that there was a 69% annual rise the value of new lending to limited company borrowers – equal to £1.5bn – in Q2 2023, a likely correlation with the phasing out of tax relief on buy-to-let mortgage interest, which began in 2017 and ended in 2020.
During that time, the majority of landlords making new purchases bought through a limited company to mitigate the impact of the tax changes on their profits.
Those on 5-year terms are now coming to maturity, which is going to drive a lot of remortgage business this year.
As in the residential market, last year saw more borrowers remortgage to another lender. UK Finance figures show an 18% drop in the number of buy-to-let product transfers conducted in Q2 last year.
Buy-to-let mortgage rates are more competitive this year, and yields are still strong where the commercials stack up well. We’re of the view that the buy-to-let market will continue on its path towards larger portfolio landlords operating through limited companies and specialising in higher yielding houses in multiple occupation (HMOs), multi-unit freehold (MUB) and leasehold blocks, new-builds and holiday lets.
This is not vanilla lending –underwriting deals of this kind requires specialist knowledge and expertise. It is more complex and as such requires a common-sense approach, as well as access to a broad range of specialist lenders that can meet this demand. ●
Why care about hitting £10bn?
We see many numbers bandied around in this industry, which can have a numbing effect. So why should we all, especially brokers, care that bridging exceeded £10bn last year? Because smashing £10bn signals a shi – a sign of things to come.
As the events season gets underway, brokers might want to rethink sprinting past the bridging providers’ stands – we all know the bridging dodgers – or consider expanding their offerings. As bridging becomes a mainstream financial tool, it’s worth building new relationships. Dust off the black book to determine what clients might benefit from: service, flexibility, rates, and criteria – plus the all-important proc fee offerings.
Bridging providers are set to offer more than a branded pen at this year’s events. Expect some serious A-game tactics to win over brokers, as the competition is fierce.
A more competitive property market, property investors driving demand, chain challenges, and an evolution in lenders have all contributed to bridging exceeding £10bn in 2024.
If a client faces increased competition to buy a property, the speed achieved with bridging becomes a strategic choice. In addition, the demand for properties to refurb, buy-to-let expansion, and auction purchases is rising, compounding the need for fast finance. Then, add the painfully slow British property buying system, tighter affordability, and higher-than-previous rates to the mix, and the recipe for £10bn is clear.
Finally, in the last decade, the bridging industry has changed beyond recognition to meet the needs of brokers and their clients – a solution waiting to solve all the above.
There are tremendous opportunities for brokers: more commission opportunities with deals closing faster than traditional mortgages, a chance to provide a service with a complete offering, differentiating against other
RICHARD KEEN is national sales manager at Green
brokers that don’t offer bridging, and being able to offer regulated and unregulated loans for homeowners or professional developers.
Most borrowers aren’t familiar with bridging, or still remember it from the past, so explaining options to clients is vital. It’s also essential to get to know different bridging providers, as they all offer different products, beyond the rate. Get comfortable with where bridging is right or wrong – for instance, auctions, chain-breaks, or property development with an exit strategy within 12 months.
There is a huge opportunity for brokers who explore bridging lenders’ products and services. Those who build relationships and can flex their muscles to help clients capitalise on property fast will quickly become the go-to for future purchases. ●
eld Bridging
Strong relationships will be essential in the weeks ahead
DARRELL WALKER is director of sales and distribution at ModaMortgages
The property market has enjoyed a bullish start to 2025. Major house price indices all present upward trends, with Halifax showing that the average property price hit a record high of £299,138 in January.
Political and economic stability – at least comparatively, following several years of turbulence – have allowed confidence back into the market.
More than that, the decline in the cost of borrowing over the past six months, and expectations that this will continue to fall throughout the coming year, is a shot in the arm to prospective homebuyers and buy-tolet (BTL) investors.
Building on this momentum was the first base rate cut of 2025. That said, speculation remains as to how many times the Bank of England will repeat this during the rest of the year.
Predictions that there will be four or five cuts over the year ahead seem overly optimistic at this point. According to the central bank’s own forecasts, the headline rate of inflation will rise to 3.7% later this year, and remain above the 2% target until 2027. That could slow down the speed at which the base rate is lowered.
The heat is on
Nevertheless, the market has turned a corner in recent months. More favourable economic conditions have been compounded by an added degree of urgency among buyers – as many brokers and lenders will have seen in recent weeks, there is a rush to complete on purchases before 1st April, when Stamp Duty Land Tax (SDLT) bands change.
As of April, the nil-rate band will be halved, meaning buyers will now also have to pay the duty on
everything over £125,000. In real terms, any property bought for more than £250,000 will be subject to an additional £2,500 in SDLT.
The reforms are not significant enough to suggest that deals will be abandoned, nor is there likely to be a drop in buyer demand as we move past the deadline. But the savings to be had have been enough to turn the heat up on brokers and lenders – and certainly on agents and conveyancers.
A more buoyant market, coupled with the urgency brought about by the incoming changes, brings a sharp focus on the services of lenders and brokers, placing even greater emphasis on the need for both parties to work together.
Honesty and speed
What does this all mean in practice? Whether working with homebuyers or landlords, there is no time to be wasted as brokers seek the right products. This underlines the value of three vital qualities from lenders: honesty, speed and communication. These values are always imperative, but when time pressures become more commonplace in the applications landing on a lender’s proverbial desk, then the importance is heightened. First, honesty. Decades of experience in the specialist market have taught me that there are few things that annoy brokers as much as being messed around by lenders that lead them on, suggesting they will be able to handle a case, only to then pull out later. Days, maybe even weeks are lost, and relationships sour.
Even if a lender must be frontup and say it cannot take on an application for whatever reason, being honest as soon as possible will be respected. Brokers want that as they face pressure to support clients at pace.
Next, speed. When the answer is ‘yes, we can lend to this client’, lenders must still be able to act quickly. Experienced and talented personnel, slick processes – with best-in-class technology – and availability of capital will all precipitate a quick drawdown. Brokers will likely know which lenders are efficient and which are not, but again, li le spikes in activity such as the one we are seeing now are a great opportunity to underline these credentials.
Finally, clear and proactive communication must underpin the entire broker experience – from confirming whether an application will be taken on right throughout the underwriting and delivering process. No one wants to be le in the dark. Lenders must, ideally, have multiple channels open to support brokers, be it telephony, email, or even live chat.
Embracing the challenges
The property market is alive with activity, in the buy-to-let market just as much as residential. It is in periods like this that the cream typically rises to the top. This is an opportunity for lenders and brokers to form stronger relationships by successfully completing on deals in a pain-free way; those lenders that let brokers down will risk longer-term reputational damage.
At ModaMortgages, our mantra is that we’re the home of ‘smarter, faster, simpler’ buy-to-let mortgages. We’re excited to embrace the challenges that this short-term rush will likely throw at us, and prove to brokers that we’re true to our words. ●
Product transfers in brokers’ toolkits
If we were to poll our sales team or business development managers (BDMs) about the top requests from brokers, there’s no doubt that a product transfer offering would be near the top of the list. A er all, product transfers offer a straightforward alternative to a traditional remortgage, with less cost, paperwork and time taken.
Up until very recently, our answer to those requests was always ‘not yet’. In truth, it’s well known that offering product transfers is more complex in the specialist buy-to-let (BTL) space.
Nevertheless, there is absolutely a need and demand for it – both from landlords looking to minimise stress and expense when refinancing, and from brokers looking to protect the long-term client relationship when choosing a lender to place their case with.
While brokers want a lender that can meet their clients’ needs and deliver an efficient service at the outset, they also need to know options are available on the backend, too.
It’s something we’ve been very conscious of in our efforts to support brokers and their landlord clients. That’s why, behind the scenes, our team has been working hard to develop and launch a product transfer offering, which is now live. With the help of our in-house technology, we’ve been able to overcome those inherent challenges to offer product transfers without compromise.
Product transfer bene ts
With a product transfer, brokers can start the process of helping clients switch to new deal up to 90 days before their current product ends. Rather than a full remortgage application, brokers can apply for a product transfer in just a couple of minutes, making the process much more efficient and hassle-free for all parties.
At Landbay, this is helped by a fully digital and automated application
process, further minimising the need for excessive paperwork.
In a buy-to-let market where timing is everything – particularly as landlords come to refinance – access to a streamlined solution is more important than ever.
Given the cost pressures facing landlords, too, the ability to save some money is also hugely valuable. Unlike standard remortgage options, which involve a conveyancer and legal expenses to transfer the mortgage from one lender to another, a product transfer eliminates legal fees.
Through Landbay, landlords can also choose between automated or Royal Institution of Chartered Surveyors (RICS) valuation options, with the former avoiding valuation fees.
Expanding the toolkit
Product transfers are not just important for a lender’s retention strategy, but for a broker’s, too. It is a really valuable way to help brokers expand their toolkit and ensure they are providing their customers with a broad range of options.
Given the demands of the market and the diverse range of landlords, brokers absolutely need a competitive and comprehensive range of products at their disposal.
This must be the approach of all lenders to make sure they best serve their broker partners. For example, providing a product that is not limited to standard buy-to-let properties, but extending to landlords with houses in multiple occupation (HMOs) or multi-unit freehold blocks (MUFBs) – this is not something that is readily available, but it supports those who can o en face additional hurdles when coming to refinance.
Looking ahead
As long as the buy-to-let market prioritises speed, convenience and cost savings, there’s no question that product transfers will continue to
ROB STANTON is sales and distribution director at Landbay
There is a healthy number of lenders that are not just open for business, but are actively trying to innovate”
play an important role in the mortgage mix. That is especially true given the high levels of mortgage maturity we can expect to see in the coming 12 months or so.
That’s not to say it should go live and be le alone, though. Alongside ensuring rates remain competitive to support both brokers and landlords, any product transfer proposition has to be alive to the challenges of the market and deliver real value.
We see our launch into product transfers as the beginning, leaving the door open to develop and expand the range as soon as the opportunity presents itself.
It’s yet another reminder to those that want to talk down the buy-to-let market to think again. Yes, there are obstacles, but there are also massive opportunities far beyond investment properties up and down the country.
Just as important is the fact that there is a healthy number of lenders that are not just open for business, but are actively trying to innovate and help landlords in their efforts to build, expand or refinance their rental portfolios. ●
Meet The BDM
The Intermediary speaks with Brian Kerr, BDM for South West, Wales & London at Magnet Capital
How and why did you become a business development manager (BDM)?
Like many BDMs I’ve met in the industry, I didn’t set out to become one. My background is in recruitment, where I worked across industries including engineering, education, and tech consultancy.
However, that experience did give me invaluable skills: relationship management, problem-solving, and strategic thinking – all skills that make a great BDM in my opinion, and I’m grateful that I now get to apply those skills in a sector I’ve always had an interest in.
I probably most enjoy witnessing our clients bring their projects to life – knowing that I’ve played a part in that journey by helping to provide
the right nance at the right time is what makes the job so ful lling. I’ve de nitely found my true calling.
What brought you to Magnet Capital?
One of the biggest draws for me was being given the ability to be involved in the decision-making side of the lending process.
Unlike some BDM roles where you’re purely focused on origination, working at Magnet Capital allows me to gain a deeper understanding of the development process, getting involved and seeing a project through at every stage.
ere’s also a real sense of camaraderie in the team as we work so closely with our clients, taking the time to understand their challenges, playing a key role in getting their developments over the line.
Being part of a lender that takes a hands-on approach – not just in the way we assess a case, but in how we support our clients thoughout their development nance journey –makes a di erence.
It’s incredibly rewarding.
What makes Magnet Capital stand out from the crowd?
Magnet Capital focuses on building longstanding relationships with clients, supporting them from their rst development right through to their larger scale projects. Many of our clients return to us time and time again for their next project, which is testament to the strong relationships we build and the trust they have in our ability to deliver.
As an example, we recently provided a client with a development
nace loan for a new-build house in desirable village in Essex – this was our client’s 10th project with us, and testament to the strong relationship we’ve built with them over the years. Our ability to move quickly and truly understand their needs has meant they’ve continued to trust us to support their developments time and time again.
Plus, we don’t just sit behind a desk, we’re out on-site, meeting developers face-to-face and seeing projects rst-hand. Regular site visits allow us to understand the client’s vision and challenges, and stay actively involved in the progress, providing real-time support when needed. We really take the time to get to know our clients and their projects inside out. We’re not just here for one deal – we’re invested in long-term partnerships, supporting developers throughout their journey and helping them grow.
What are the challenges facing BDMs right now?
One of the biggest challenges BDMs face today is the the length of time it takes to nalise nance for clients, particularly due to solicitors and planning delays.
Managing client expectations can be a constant balancing act, too, as many clients have diverse income streams or non-traditional nancing needs, and it’s a BDMs job to ensure that they are on-hand, o ering solutions to any problems so that the client secures the right deal.
Standing out is more challenging than ever now, too. With more lenders entering the market, BDMs need to go beyond just talking about their products, they need to provide exibility and certainty to brokers to make themselves stand out from the crowd.
What are the current opportunities for BDMs?
e development nance sector is constantly evolving, creating plenty
of new opportunities for BDMs to add value and support.
Mainstream lenders have tightened their lending criteria, making it more challenging for developers – especially small to medium enterprises (SMEs) and rsttime developers – to secure funding. is shi presents an opportunity for BDMs. We should be on-hand to support those brokers unfamiliar with the development nance process, working closely with them to quickly secure the right funding solution and keep their clients’ projects on-track.
As banks pull back, brokers need reliable funding partners more than ever. BDMs who strive to provide ongoing support can unlock new lending opportunities, helping both brokers and developers succeed in a changing market.
How
do you work with brokers to ensure the best outcomes for borrowers?
Every development nance deal is di erent, and we work closely with them to understand their client’s needs and structure the deal with a fresh approach.
Providing certainty is a big focus at Magnet Capital – we keep our brokers fully informed at every stage, providing realistic expectations and timelines and ensuring there are no surprises along the way. at said, while we always strive to structure a deal that works, we know that not every deal will t our criteria. Instead of leaving brokers without options for their client, we are upfront from the outset and will point a broker in the direction of a lender that may be able to help. Our goal is to ensure that our brokers can still help their clients secure the right nance, even if it’s not with us.
As mentioned previously, we also like to get on-site, meeting the client and seeing the project. is gives us a better understanding of the scope, potential, and challenges, allowing us to make faster, more con dent lending decisions.
What advice would you give potential borrowers in the current climate?
Rather than focusing solely on the cheapest deal available, the best thing borrowers can do right now is build long-term relationships with a team they can trust.
In the current climate, having the right team around you can make or break a project – especially when confronting challenges like shi ing interest rates, stricter lending criteria, and market uncertainty.
A good broker will match them with the right lender and make sure an application is presented to that lender in the best possible way. ey’ll also help streamline the process, negotiate terms, and access lenders that truly understand development nance.
Whether it’s their broker, lender, or construction team, if a borrower surrounds themselves with experienced, reliable partners it will provide certainty when it’s needed most.
InQ&AProfile.
The Intermediary speaks with Michael Mann, broker business development director at Allica Bank, about the firm’s fresh direction for 2025
Michael Mann joined Allica Bank just over four years ago, bringing with him expertise developed over a career primarily in corporate banking,. Now, as broker business development director, he uses this expertise in the bank’s mission to fuel growth among established small to medium enterprises (SMEs). As Allica Bank sets out into 2025 with a refreshed brand image and a growing suite of products and propositions, The Intermediary caught up with Mann to get a sense of the firm’s direction.
Then and now
Over the past four years, Allica Bank has grown from a primarily debt-led bank, to lending over £3bn to established businesses, with a full suite of products, a current account and savings accounts.
“I’ve been very lucky to have grown with the business as it has grown,” Mann says.
Launched in 2020, Allica has been “on an impressive journey.” While this was undoubtedly a difficult time to launch a new bank, Mann notes that there were also advantages.
He says: “What made it easier was that we saw competitors retract, which provided us with an opportunity to step up to support brokers and businesses when they needed it the most, and when other lenders and banks were closing their doors. There’s always a silver lining, and it proved to be a positive.”
One helpful factor was that Allica was not constricted by the need to service and existing loan book. This meant it was “well positioned to respond” to the challenges and changes that rocked the market in those early years, and focus on “lending to businesses focused on growth, when others didn’t have the capacity to do so.”
Mann explains: “A big bank that has been lending for years with lots of customers – many of whom will be facing difficulties – naturally goes into ‘protection mode’.”
The other element that put Allica in good stead was being a fintech. At a time when other banks were struggling to find ways to translate cumbersome legacy systems to the new world of remote work, this was something of a seamless shift for Allica, with programmes like Teams
already in play.
“That really allowed us to maintain relationships and collaborate with brokers, valuers and solicitors,” Mann says.
Mann says there is a potential that brokers will remember this as a brand that stood out during turbulence, but this is not something to rest on.
“People buy people in this market, they work with individuals, and people do remember that we were there lending,” Mann explains. “Then, a lot of it is about product and deliverability.
“There will be some value to people remembering that we didn’t disappear, but that doesn’t mean we’ll be their choice over a competitor, because it’s about getting the right product for their client, and we might not always be that best solution. Just because they remember, doesn’t mean we get all their business. You’re only as good as your last deal.”
Five years on, Allica Bank has started 2025 with a brand refresh, centred around the image of a bright orange bowler hat. The hat, used for a while in marketing campaigns, represents how Allica is transforming finance for established businesses by combining the relationship banking they used to enjoy, with powerful technology and rewards for using their account.
Small but mighty
Allica Bank was built to serve established businesses with five to 250 employees. These, Mann points out, make up an integral third of the UK economy, with critical roles as employers, service providers, retailers, and more. These businesses really needed support during Covid-19, but their welfare is just as important now.
“With the country now focused on growth, they are absolutely our priority,” Mann says. “They won’t get the attention they deserve from the high street, and a lot of SMEs are underserved by a callcentre, cost-saving type set up. SMEs need that regular relationship and contact, so there has been a lot more reliance on our broker community, who have the experience and ability to give advice.
“These businesses are the backbone of our economy, and it’s them that will get us through the next 12 to 20 months of economic pressures.”
Having a focus on personal relationships is not to be confused with lacking modernity, Mann says:
“Being a tech-enabled business means all the tech we have enables us to collaborate and be nimble.”
This fits with Mann’s own corporate banking background, which he says lays the foundation for getting to know a business directly, learning about the people, and “looking at each deal based on its own merits.”
“Brokers have filled that void for a long time now,” he adds. “They get under the bonnet of these customers and businesses, and then collaborate with banks like ourselves to give them the support they’ve been missing.”
Core to this is the understanding that “no two deals are the same,” and that when something lands outside Allica’s core appetite, with the right borrower and deal, it can “be commercial.”
Expanding product range
Allica has expanded into new product areas over the years, including a move into the world of bridging lending with the acquisition of Tuscan Capital in August 2024.
As for the proposition itself, Allica is “not here to compete with vanilla BTL and the mainstream,” but instead, to solve more complex problems. This might include large houses in multiple occupation (HMOs), multi-unit blocks (MUBs), portfolio refinances, and more – all of which is “in keeping with what we’re about as a commercial lender, as large portfolio landlords are also SMEs, and important to the UK economy.”
Mann says: “The main aim is to provide the full suite of products and services that (SMEs) require throughout their journeys. We want to be able to support them in as many ways as we can.
“This was a natural fit for Allica. With our commercial proposition, for example, we were seeing a number of deals where a property needed refurbishment or updating, and we couldn’t necessarily support the transaction because it was a bridge required.”
“Having done bridging myself in a past life, it’s a different market and a different type of expertise,” Mann adds. “What Allica is very good at is, using expetise and honing it to our advantage. Building out a new bridging firm would be possible, but this was a natural fit. They’ve got the track record; we’ve got the reach.”
While the two firms have combined, with Tuscan rebranding to Allica in January 2025, there are still some clear distinctions, Mann explains: “You can’t underwrite and process a bridge the same way you do a term loan. Bridging has to be quick and simple, completing in a third of the time, with different checks and due diligence.”
This means having a distinct back office, underwriters and sales function. Nevertheless, Mann says Allica is always looking for more ways to combine and complement its services, with “more to come in this space.”
Building out buy-to-let
In February, Allica further expanded, launching into specialist buy-to-let (BTL). This, Mann says, was a matter of demand from brokers who “wanted to see Allica competing in this space.”
Mann says: “The specialist BTL market has always been important. There are a lot of landlords out there who have got very large portfolios and are able to provide much-needed housing. As regulations and tax implications change, we start to see a change around demand and competition. But this is a market that has been around a long time, it’s fundamental to our economy, and it’s a buoyant market we can support.”
While much maligned, the BTL market is much like the rest of the country and economy, Mann says: “We adapt, we overcome, we change course and get back onto the track. There will be some casualties, as there always are, but the BTL market will always be there.”
Buy-to-let, bridging and Allica’s original lending proposition all form part of a wider tapestry that aims to provide all the support needed for businesses and landlords. For example, with the impending issue of Energy Performance Certificate (EPC) requirements likely to affect many clients, Mann points to bridging as a key tool to be used in updating properties and meeting evolving regulatory rules.
On the journey
Relationships, speedy decision-making enabled by tech, and an evolving product set – all increasingly important factors in the modern specialist market.
Beneath all of this, Mann says, is the fact that brokers are more important to established SMEs than ever before, particularly when it comes to introducing the specialist options available.
“Interest rates are starting to come down, we’re starting to see the gilt market start to stabilise a bit more, which impacts fixed rates and makes things a bit more affordable,” he explains. “There has therefore been a bit of a step change, and the time now is for brokers to cement themselves as an integral part of the SME journey.”
For Allica Bank itself, Mann concludes: “We will continue to focus on this growth and enhancing our proposition, tweaking those dials where we see there is going to be the best impact.
“For brokers, our focus hasn’t changed –it’s about empowering them to help more of their clients.” ●
MICHAEL MANN
Commercial property: Diversify and thrive
CONOR MCDERMOTT is director of SME lending at LHV Bank
With a potentially volatile UK economy in 2025, it will pay to broaden the range of assets commercial property investors include in a portfolio.
Commentators predict between two to four Bank of England base rate cuts this year, but all continue to note the fluid nature of global politics, the Government’s plans for growth, and the cost-of living struggles.
Repossessions have risen significantly since the forbearance tactics enforced during the pandemic, but are still historically low, according to UK Finance. The 6,440 mortgage possessions taken through 2024 was still 20% lower than the average seen in the five years before 2020 and 87% below the previous peak seen in 2009.
So, opportunities will arise as the economy shifts and changes, and diversification into a range of different asset classes and property types has always made strategic sense for any property investor. By mixing and honing those underlying assets, investors will create a strong barrier against risk.
Shifting strategy
The commercial property market is undergoing a transformation as investors rethink their tactics to accommodate changing economic conditions. If investors have the right lending partnerships in place, they ought to expect relationship-driven support at every stage of their property and portfolio development.
Rather than focusing solely on capital appreciation, many are diversifying across asset types, seeking income-generating opportunities, and rationalising their portfolios.
Some investors are moving away from long-term, speculative, capital appreciation-based investment and prioritising assets that generate a stable income. Examples include Legal & General’s Build-to-Rent (BTR) strategy across cities like Birmingham, Manchester and London, which offer long-term rental income and secure cashflow as rental demand rises.
Equally, as e-commerce tightens its grip globally, investing in large-scale logistics warehousing as opposed to struggling high street retail outlets continues to offer another type of secure rental income. Student lets have become another strong prospect in cities with dense university populations, as demand remains high regardless of economic cycles.
For those investing in these asset types, the capital appreciation is a given, but they also offer the prospect of a stable income.
Investor trends also include the trend of rationalisation – selling properties which have already been refurbished or which no longer offer a value-add element. Next, the cash is released to reinvest in more strategic assets.
Another trend gathering pace is the development of unbroken freehold blocks, and those with airspace or development potential above the building. The sustainability and cost-efficiency of these types of developments appeal because there’s no need to buy the land, reducing the development cost. The Government has also relaxed permitted development rights, making it easier to get approval on these projects. So, coupled with high housing demand, many investors are investigating these opportunities and either adding extra floors, extending rooftops, or selling
or leasing the development rights for these buildings.
Plenty of commercial investors continue to look beyond the potential of residential portfolios. Mixed-use developments with office space, a residential element and commercial property are gaining popularity for their resilience in the fluctuating market conditions currently.
According to LendLord data drawn from 1,126 houses in multiple occupation (HMOs), the hotspot with the highest average yield of 15.4% for HMOs is for investments in the North East. However, the NorthSouth divide still means the highest annual rental return emerged out of the South East at £46,041. This is why many investors choose to diversify portfolio investments across the UK, adding a more consistent mix to large portfolios.
Supporting investors
Lenders with the expertise and capacity to provide the finance for a wide range of commercial and mixeduse properties will be the best partners as investors look to expand further.
Providers can offer tailored solutions through seasoned business development managers (BDMs) who are happy to advise or handhold investors through the complexities of the market. For example, we offer flexible repayment structures, including providing equity releases for those keen to be ready to strike when an opportunity arises.
Whatever this year climate brings, partnering with the right lender will be key to success for any investor. ●
The evolution of specialist
The specialist lending market in the UK has undergone a remarkable transformation over the past two decades, driven by a mix of product, customer and distribution changes. The landscape is now evolving faster than ever with an increasingly dynamic and digital landscape.
However, while these advancements are positive, the industry still has a way to go before it reaches the level of technological sophistication seen in other sectors. Many challenges remain, including fragmented systems, inconsistent adoption of digital tools, and a need for greater automation to reduce friction in the lending process.
Looking ahead, the next decade promises even more disruption, with artificial intelligence (AI), automation, and regulatory shifts set to further redefine the way specialist lending operates.
A look back
Since the Global Financial Crisis, mortgage lending has been dominated by high street banks, which often overlooked non-traditional borrowers. Where these underserved customers were served, the lending process was predominantly manual, with applications submitted on paper, requiring significant back-and-forth between brokers, lenders and solicitors.
Mortgage applications often took weeks or months to process due to missing documents
and manual underwriting. Brokers relied on physical files, leading to inefficiencies and the risk of data loss.
At the time, there were platforms to connect brokers, lenders and thirdparty services, meaning key stages such as affordability assessments, credit checks, and document validation were handled in silos, delaying the process.
Compliance and security concerns were also prevalent, as early-stage technology struggled to keep up with the enhanced regulatory and compliance demands.
Today’s landscape
Today, lenders have started to embrace digitisation and see it as a means to create competitive advantage, not just reduce costs and risk.
With technological innovations streamlining operations and improving borrower experiences. Cloud-based ecosystems now allow lenders, brokers, and credit agencies to collaborate in real time, reducing friction in the application process. Borrowers benefit from increased transparency, as they can track their application status online, alleviating uncertainty.
Modern application
programming interface (API) infrastructures have also revolutionised the industry, integrating with third-party services such as Experian to enable automated credit assessments and Open Banking. What once took days now takes minutes, expediting approvals and reducing administrative burdens. With the introduction of General Data Protection Regulation (GDPR), the focus on data security increased, with encrypted platforms ensuring borrower data remains secure and meets regulatory standards.
Additionally, the rise of specialist lenders has brought tailored solutions for complex cases. This growing market increased competition and expanded options for those who previously struggled to secure financing.
technology in lending
Despite these advancements, challenges remain, including the prevalence of legacy systems restricting lenders’ ability to cater to complex cases, regional disparities in access to specialist finance, increasing operational costs due to regulatory requirements, and the need to balance automation with personalised service.
The road ahead
The next decade is set to bring even greater technological transformation. Artifical intelligence (AI)-enabled underwriting and fraud detection will likely play a central role, with models assessing borrower risk using behavioural data, spending patterns, and predictive analytics.
Fraud detection will become more sophisticated, allowing lenders to flag potential risks earlier in the process. AI will also enhance document automation and summarisation, analysing and condensing lengthy documents to reduce manual review times significantly.
The industry is expected to shift towards hybrid human-AI lending models, where AI assists brokers with risk assessments and case recommendations, but human
expertise remains essential for final decision-making.
Regulatory evolution will continue, with Governments likely introducing new affordability regulations and schemes to address changing borrower needs.
Shifting borrower demographics, including first-time buyers facing affordability challenges due to rising property prices, will prompt lenders to develop more flexible solutions.
Despite these advancements, challenges will include ensuring that AI-driven lending remains ethical and inclusive, balancing technological progress with human oversight, and maintaining accessibility for less techsavvy borrowers.
Strategic implications
The continued evolution of technology in specialist lending will impact key stakeholders in different ways. For brokers, automation will handle administrative tasks, allowing them to focus more on advisory services and personalised client interactions.
Investment in digital tools will be crucial to stay relevant and improve customer experiences. Lenders will need to adopt scalable, adaptable technology to remain competitive, using predictive analytics to anticipate borrower needs and adjust offerings accordingly.
ANDREW LLOYD is chief executive o cer at Fignum
Regulators will play a vital role in overseeing AI implementation in lending, ensuring ethical practices while encouraging innovation through new consumer protection measures.
Best of both worlds
Technology has gone some way to enhancing specialist lending over the past 20 years, breaking down barriers and improving accessibility for borrowers with complex financial situations.
As we look toward the future, further advancements in AI, automation, and regulatory frameworks will start to redefine the specialist lending landscape.
However, the challenge remains in balancing technological progress with human expertise, ensuring that lenders and brokers can harness the best of both worlds to deliver efficient, ethical, and inclusive financial solutions.
Exit bridge loans: Reduce risk, boost returns
In today’s dynamic real estate market, exit bridge loans have emerged as a strategic solution, providing shortterm financing to bridge the gap between project completion and final sales or longterm refinancing.
Exit bridge loans can help developers avoid distressed sales, improve cashflow, and capitalise on market timing to secure better returns. They also have a role to play in mitigating financial risk by offering flexibility when facing sales delays or refinancing challenges.
As uncertainties persist, understanding how to leverage this tool could be key to safeguarding investments and driving profitability in today’s property landscape.
Minimising risk
Development exit bridge loans are short-term financing solutions designed to cover the gap between the completion of a project and its sale or long-term refinancing.
Typically lasting six to 18 months, these loans help developers settle outstanding obligations, refinance construction debt, or hold onto completed properties until market conditions improve. Considering the market dynamics of the past three years, it’s no surprise that their speed and flexibility have made exit bridge loans a key tool for developers seeking rapid access to capital.
One of the key reasons exit bridge loans have gained popularity in recent years is their ability to help developers mitigate financial risk. There are three main ways development exit bridge loans help developers safeguard their interests.
First, these loans help developers avoid distressed sales. By providing the
financial flexibility needed, exit bridge loans allow borrowers to avoid rushing into sales at reduced prices, giving them more time to secure better offers.
Second, exit bridge loans help prevent loan defaults. These loans enable developers to meet repayment deadlines on construction loans, protecting their creditworthiness and ensuring that future projects are not jeopardised.
Third, exit bridge loans assist developers in managing cashflow. They offer valuable breathing room to cover operational costs while awaiting sales or securing long-term financing.
Boosting returns
Another key reason exit bridge loans have become increasingly popular is that they serve as a strategic tool for maximising returns.
There are three main ways these loans help developers enhance their project profitability.
First, they allow developers to take advantage of market timing. By postponing sales until market conditions improve, developers can secure higher prices.
Second, exit bridge loans provide developers with the opportunity to reinvest their capital. By freeing up funds from completed projects, developers can reinvest sooner, accelerating their growth.
Third, exit bridge loans strengthen developers’ negotiating power. Without the urgency to sell quickly, they can secure better terms when negotiating with potential buyers.
Supporting developers
One year on from the launch of our own development exit bridge product, at BLEND we have witnessed firsthand the demand and the popularity of this product.
These loans help developers settle outstanding obligations, re nance construction debt, or hold onto completed properties”
Our exit bridge product, secured by an institutional funding line to support property developers, was launched after recognising the challenges property developers have faced over the past 30 months. Our goal was to support developers with completed projects carry them until a fair price sale is achieved.
In today’s property market, with ongoing economic uncertainty and fluctuating market conditions, exit bridge loans are becoming an increasingly popular tool for developers because they offer a strategic way for developers to manage risk and maximise returns.
By providing short-term financial flexibility, they allow developers to avoid rushed sales, improve cash flow, and seize market opportunities. For those looking to safeguard their investments and drive profitability, understanding and leveraging exit bridge loans can be a game-changer.
Going forward, as lending platforms evolve and access to financing becomes more streamlined, exit bridge loans are likely to play an even larger role. ●
ROXANA MOHAMMADIANMOLINA is CSO at BLEND
Why planning reforms won’t flood the market
Aproperty investor reading the news here in the UK could be forgiven for thinking that planning reform is about to inundate the market with new-build properties, swamping supply and relieving pressure on prices.
The media’s focus on planning is understandable, particularly as the Prime Minister has voiced strong support for loosening planning laws. Starmer has promised to use these reforms to build nuclear reactors, to boost economic growth, and to deliver 1.5 million new homes over the next five years in a bid to solve the housing crisis.
On the surface, this seems like a simple and effective solution: remove the bottlenecks in the process, and investors will be able to build more homes – or power stations – leading to enough supply to put downward pressure on both house prices and rents.
A more nuanced reality
Planning reform alone is not a cureall for the UK’s housing challenges. Potential landlords, property investors considering expanding their portfolios, or international buyers –the UK is now the number one market for overseas property investment, according to think-tank Common Wealth – don’t need to worry about a glut of property coming to the market.
While reform may help boost housebuilding rates to some degree, there are three reasons why I think it is unlikely to materially impact the supply of property in a way that some may expect.
First, it’s important to remember that securing planning permission doesn’t automatically guarantee new
homes will actually be constructed. As reported by Common Wealth, since 2007, developers have obtained permission to build more than 1.4 million homes that they haven’t actually built.
Second, even if the new permissions do lead to a significant uptick in the number of homes to be built, we must address the fundamental question: who is going to build them?
According to Statista, there are currently around 2.14 million people employed in the construction sector in the UK, compared with just over two million in the first quarter of 2000. Britain needs an extra 25,000 bricklayers, 10,000 carpenters and 4,000 plasterers, according to the Home Builders Federation (HBF) and the Construction Industry Training Board. The Recruitment and Employment Confederation (REC) says there were more than 100,000 job postings in the construction industry alone in January 2025 – a 13% increase from December 2024.
Meanwhile, the number of builders has fallen by 20% overall since the Global Financial Crisis of 2008. The number of 16 to 24-year-olds in the building trade has been declining consistently. There’s no European labour to plug the gaps either – not after Brexit.
Government plans to train apprentices have been described as “a drop in the ocean” by the HBF – and dropout rates among young construction apprentices are as high as 40% on some courses.
Patrick Hickey, a former head of development at housing association Arcon in Manchester, says the construction industry has been grappling with the “ticking timebomb” of an aging workforce for years, with more than 20% of the
MARK MICHAELIDES is chief commercial o cer at Molo
workforce over 50 and due to retire within the next decade.
This shortage of skilled workers is one of the reasons 2024 saw the lowest number of new homes built in a 12-month period since 2017, excluding Covid-19, according to Savills. Total completions for 2024 were just 217,911, according to Energy Performance Certificate (EPC) data, compared to 231,000 in 2023 and more than 253,000 in 2022.
Third, the type of homes being built may not align with what landlords’ potential renters are seeking. The Build to Rent (BTR) sector, by way of example, now accounts for around one in five new homes built. More than 90% of BTR homes are designed for single individuals, couples, or flatshares. These properties tend to cater to a more affluent demographic, focusing on higher-end apartments. These properties are not competing with, say, the semi-detached homes for families with 2.4 children that the Government is looking to build.
While the intention behind planning reforms is to boost housing supply, it’s clear the challenges facing the UK housing market are multifaceted. A shortage of skilled labour means that the flood of new homes is unlikely to materialise. Those that do get built will not necessarily rival the sort of properties investors are purchasing.
Prospective landlords should not assume that planning reforms will drastically shift the dynamics of the housing market.
The issue is more complex, and while some increase in supply may occur, it is unlikely to result in a material drop in prices or rents. ●
Quality matters as much as quantity
The Government’s pledge to build 1.5 million new homes by the end of this Parliament has been warmly welcomed by those of us who believe that housebuilding should become a real priority in this country.
Labour has described its plans as the biggest increase in social and affordable housing in a generation, with the aim of delivering 300,000 new homes each year. This is despite research by Savills indicating that UK housebuilding continued to fall last year, with just over 200,000 new homes completed, the lowest number since 2017.
Meanwhile, the New Economics Foundation has estimated that the number of new social homes must increase tenfold by 2028, to at least 90,000 annually, compared to the 9,000 built last year.
Quality over quantity
Putting aside the practicalities of its ambition, the Government’s target does at least give everyone in the housebuilding sector something to work towards. It is just going to be essential that we prioritise quality over quantity.
Some developers have already been accused of doing the bare minimum necessary to turn a profit and fulfil their basic planning obligations. This approach has too often resulted in identikit housing estates that lack any real sense of place or community identity. With the pressure to build increasing further, we risk ending up with whole neighbourhoods ill-suited to the needs of future residents. In the long term, this undermines the very value the Government’s new housing goal is meant to provide.
I think often this comes down to a sense of ownership. A private developer’s primary interest often ends once the site is built and sold,
enabling them to move on to the next project. In contrast, housing associations and local authorities remain the custodians of their homes long after the first people move in. Because of this, public sector bodies have a vested interest in ensuring their properties are built to a high standard, remain energy-efficient, and are constructed from materials that will stand the test of time.
Future needs
Not only must these homes continue to represent the councils or housing associations positively, they must also be designed to meet residents’ current and projected future needs. A well-built home that is economical to heat and comfortable to live in encourages longer-term tenancies, but poor design and low-quality materials will lead to higher turnover rates as tenants become dissatisfied, driving up maintenance costs.
With both private and public-sector housebuilders needed to deliver the country’s new homes, it has never been more important for them to work in partnership. Ideally, these collaborations should merge the speed and cost-effectiveness of volume building with the community-centred focus of public sector organisations. Private developers bring not only capital but also certain efficiencies in construction, while housing associations and councils will be more likely to advocate for sustainability, social value, and the long-term wellbeing of residents.
Getting the balance right will ultimately benefit residents and the community if green spaces, communal facilities and thoughtful architectural choices are prioritised alongside speed and cost. For example, by blending standard housing models with design details that match the nearby environment, it is possible to create more cost efficient developments that still feel coherent
JONATHAN PEARSON is director at Residentially
and unique, with a strong sense of place that reflects the local heritage.
After all, the Government’s goal is not just to construct a vast number of new homes, but to create thriving new communities that will stand the test of time because they are places where people want to live, work, and spend their leisure time. Its ambitious target represents a significant opportunity to address a long-standing housing shortage, yet we must recognise that how we build is just as important as how much we build.
Not in my back yard
This means empowering rather than alienating local communities, so that we can build hundreds of thousands of new homes every year without sparking a wave of local opposition across the country. The more local people understand and feel part of the decision-making process, the more likely planners will be to grant permission for schemes that reflect each local community’s wants and needs. However, developers who ignore local identity and aspirations only fuel the illogical concerns voiced by ‘Nimbys’, with these battles often dragging out planning processes.
If we embrace thoughtful partnerships between the private and public sectors, and carefully tailor plans to reflect local character and the local community, I believe we can deliver the volume of housing needed without sacrificing quality. More than just the bare minimum, we’ll establish sustainable and vibrant homes fit for many future generations. ●
The Inter view.
Jessica Bird speaks with Jason Neale, CEO at Quantum Mortgages, about the rm’s expanding proposition, and the values at its core
quantum Mortgages rst launched into the specialist nance market in 2022. With the backdrop of a global pandemic and resulting lockdowns, and a mortgage market in chaos, this was truly a memorable moment. Since then, however, the lender has gone on to expand its proposition even further. e Intermediary sat down with Jason Neale, CEO, who speaks from his own experience of 25 years originating mortgages – always specialist, with intermediaries as a focus – to re ect on a business forged in a market like no other.
Specialist change
Over the years, Neale has worked for various specialist lenders, from non-banks to large bank institutions, including running buy-to-let (BTL) for Axis Bank in the UK. When Axis decided to close its international operations, he saw an opportunity to launch his own operation and leverage his experience.
Across more than two decades, Neale has seen signi cant change in specialist lending. Prior to the Global Financial Crisis, specialist lending was “really specialist,” largely dominated by packagers, with few intermediaries directly involved in the space.
Neale says: “As soon as a deal couldn’t go to the high street, most brokers wouldn’t know what to do with it. Fast-forward to today, and ‘specialist’ lending is the norm now.
“Historically, specialist lending was seen as cumbersome, complicated, di cult to deal with, but now, us specialist lenders are actually just as easy to deal with as a high street lender.”
is has partly been driven by the increasing complexity of client situations and the wider housing market. Nowhere is this more evident than in BTL.
“A lot of the transactions landlords do nowadays will be very di cult for an automated decisioning tool to work with,” Neale explains.
“Most banks will use some type of decisioning tool – even if they don’t use credit scoring, there will be some type of tool underwriters use to help them make the decision. However, professional landlords now have become so complex that it has become very di cult for a computer to make those decisions.
“Most of the underwriting we do, because it’s far more complex, is more like detective work. We have to nd out what’s going on with a transaction beyond the application form and the description of the property.”
Early years
e rst few years have seen the landscape surrounding Quantum Mortgages shi drastically. At the start, Neale recalls rates of 3.99% on the rm’s rst product guide. en, following the onset of the war in Ukraine only weeks a er the so launch, rates and in ation shot up, and by the end of 2022, that same product guide featured one xed rate starting with a 10. Add to this factors such as the Liz Truss mini-Budget in September 2022, and the stage was set to create a di cult period for the entire property nance market.
Neale says: “It was a di cult time for all lenders, and we were one of the only lenders that had a xed rate out in the market – most withdrew all their xed rate products. If you’re a landlord that needs to transact right now,
you still need a mortgage. So, we had a rate out there that worked in terms of what we could o er, and le it up to the landlord as to whether they took it.”
Neale takes pride in the fact that Quantum “met all [its] business plans in terms of pro tability and exceeding lending targets –reaching break even in the rst year, which is unheard of for a non-bank lender.”
Choppy waters
e market picture now, of course, has changed massively once again, but the lessons learned during this period still have weight as a core part of Quantum’s approach.
Not only did this mean continuing to provide xed rates at a time when others were withdrawing, but for Quantum, it also meant honouring its pipeline applications even during di cult times, and providing 48-hour notice of product changes and withdrawals.
Neale says: “While it was a di cult time for us as a lender, it was far more di cult for our intermediary partners, so we stuck by them and supported them as much as we could, and they’ve continued to support us.”
While there may be a misconception among some consumers that it is safer to deal with a bank, the di cult years of Quantum’s initial launch showed the value of the non-bank model, particularly in the specialist market.
Neale explains: “Having worked for non-bank lenders for many years, I thought I’d work for a bank at one point – a nice secure role – and it’s not necessarily any safer! In fact, much bank behaviour is far worse because of their need to create shareholder value and manage risk.
“ e key bene t for us is rst that, yes we have funders, but we decide our own destiny. We’re also a much more nimble business – we don’t have large committees. We can make the decision one a ernoon and start working on it the same day. We can act very quickly.”
Fast decision-making was, as everyone will remember, key to surviving the days of rapid market changes, rising interest and base rates, and unpredictable global events that could strike with fresh complications at any moment.
“From a credit risk perspective, one of the key things for us was to apply more common sense,” Neale continues. “One of the key objectives was to bring that, and transparency, back to specialist lending.
“It’s di cult to do that if you’re a bank, because you have credit and risk teams that may not always align with what’s happening in the market. But as a non-bank lender, we’ve got more control.”
Even as the waters seemingly settle, this approach is no less tting, and Neale highlights the importance of Quantum having control over its own risk appetites as it navigates around whatever developments – positive or negative – might come across the horizon next.
In specialist BTL, as the landscape continues to shi , that nimble approach will be key.
Expanding the proposition
It its core, Quantum Mortgages provides solutions predominantly for professional landlords. At the moment, only 4% of the rm’s book is made up of landlords with one property, even though they make up around 55% of landlords in the UK.
Professional landlords t the Quantum proposition, Neale says, because they have more complex circumstances – necessitating specialist intervention – but are likely to boast a better track record. is means the lender can take a more nuanced approach, founded on “faith in the landlord’s experiences,” as well as its own expertise and credit and risk pro le.
For example, Quantum Mortgages can lend on more complex properties when considering a borrower’s broader portfolio and existing experience.
Neale says: “ ese are landlords that are running their portfolio as a business. eir circumstances are more complex, but they have a track record of running a portfolio.
“If you’re a large portfolio landlord with a good track record and solid rental yield, there’s a reason you want to buy, say, a city centre at above a fast-food outlet. Virtually every BTL lender out there wouldn’t lend on that, but we could be comfortable with that, because we’re putting faith into the landlord’s understanding – perhaps that the property is highly lettable, in the city centre, with good rental yield – and the fact that they have a large portfolio with surplus income.”
In early 2025, Quantum has introduced a wider range of products and expanded its core client base. is includes branching out into catering for rst-time landlords, as well as – at the time of writing – an imminent launch into the short-term lending market.
Over the years, Quantum has tweaked criteria to keep its products current, but Neale sees 2025 as the year of adding new o erings. e short-term nance proposition is currently in its pilot phase, working with specially selected intermediaries. Meanwhile, on the BTL side, two new products include its large loan proposition, which o ers individual loans up to £5m, and which Neale sees as →
“pretty unique for a non-bank lender,” and its rst-time landlord o ering.
Keep the market moving
ere were a number of reasons Quantum Mortgages chose to start opening its doors to more rst-time landlords.
One was the sheer level of demand from brokers, which made it clear to Neale that the rm was potentially turning away good business. Beyond this, rst-time landlords are an important part of the private rented sector (PRS) ecosystem, and o ering them support – particularly where the high street might not – is key to keeping the wider property market moving and healthy.
When it comes to this cohort of clients, Neale says, it “comes down to property types.”
He adds: “ ere is still a demand for people investing in UK property. Professional landlords have moved away into higher yield property types, and they don’t tend to buy small single unit ats or houses any more, because the rental yields just don’t work for them.
“However, the PRS is really important to the UK – it’s been around 20% of the UK housing stock since the early 2000s. As professional landlords move away from the single use property, that can reduce the supply of more a ordable rental homes. First-time landlords are more agreeable to this type of property.”
Quantum can be exible on property types – even pushing the envelope to allow them to consider houses in multiple occupation (HMOs) and multi-unit blocks (MUBs) – while remaining more conservative in comparison to its larger portfolio landlord clients.
is, Neale adds, is where the specialist lender’s ability to look at all aspects of a deal comes in, allowing for an ad hoc approach, and creating a pathway into the market for a muchneeded in ux of new landlords.
Changing buy-to-let
Whether looking back to 2017 and the changes to taxation rules, or through to more recent developments in this Government’s rst Budget, there is constant change in BTL.
Even when those rst changes came in, Neale says, “life was relatively simple,” with landlords simply pivoting to special purpose vehicles (SPVs), and circumstances remaining relatively straightforward.
While the market rapidly shi s, taxation changes “really start to bite” and the cost of funding rises, the average landlord has also had to evolve at pace and “ nd more ingenious ways to extract value out of their property.”
Neale describes professional landlords as being a robust, adaptable cohort with their sights set on the long-term. He also believes that, while rental reform will shake things up, most good landlords are already doing much of what is being covered, or are at least on the same page of wanting to ensure high standards in the market and freedom for tenants.
More than anything, these changes, as well as those announced in the Budget, are fuelling an existing shi in terms of property preferences.
Neale says: “ e continued pursuit of yield is the key driver for professional landlords. e past few years have driven them towards HMOs and MUBs, but it doesn’t stop there.”
Landlords continue to evolve, and for the specialist market this means semi-commercial, and even bringing fully commercial properties into their portfolios.
“It’s o en not enough to buy an HMO,” says Neale. “Landlords are buying and converting large single unit properties, splitting freeholds, selling o separate leases – a very complex transaction – and we’re seeing a huge growth in semi-commercial over the past 18 months. en, over a short period – maybe six to 12 months – we’ve started to see more fully commercial properties in our borrowers’ portfolios. Commercial is a riskier investment and the nancing cost is therefore higher, but the yield is so much greater than residential.”
Quantum Mortgages also recently gained approval from the Financial Conduct Authority (FCA) for regulated consumer buy-to-let, making it one of a nite number of lenders with space to grow in “quite a big market in need of support.”
Death of the market
Overall, the specialist BTL market is seeing not the mass exodus that many headlines have warned of over the years, but a shi in the types of landlords and the structures of their portfolios. Neale concedes that the number of new landlords entering the market is below that of those exiting, but explains that those leaving tend to be at the more amateur, ‘dinner party’ end of the scale, as the margins simply are not there to keep them engaged.
In addition, Quantum is seeing a high number of purchase applications, suggesting that while the number of landlords overall is decreasing, the market is becoming more “complex and professional,” with properties spread between fewer, larger portfolio landlords.
Neale adds: “Ultimately, if we can see another 1% o interest rates, single unit
properties may well start to become attractive again. e one thing I can guarantee is that any property that looks attractive, professional landlords will be looking to buy.”
For those rst-time landlords coming to the market, this trend is still evident – Neale says many in this group are looking ahead to building a portfolio in the future, particularly to fund pensions down the line, for example. ere is, then, still an abiding preference in the UK to invest in property in various forms.
“ e di erence now is that professional landlords just have to work a little bit harder and diversify their portfolios,” Neale says.
Disrupting bridging
With the launch of its bridging proposition imminent, and regulated bridging in its sights, Quantum Mortgages is looking to disrupt the short-term lending market. is starts, for example, with the somewhat rare journey of going from a term lender to launching in the bridging market, which gives Quantum a slightly di erent perspective on the sector.
Neale says: “Our criteria will largely mirror our BTL terms – we’ve got pretty much a guaranteed exit. at means we will lend on a lot of properties most bridging lenders won’t, because we’re comfortable with the exit.”
In its mission to “do bridging very di erently,” Neale says the rm has done extensive research, which le him “not very impressed.”He cites a lack of transparency and certainty in some of the short-term lending market, as well as outdated processes and paper forms.
One of the things he feels will set Quantum apart will be clear and certain terms, without the kind of renegotiation of terms that in some instances ends up with clients paying a higher rate to boost commission.
“We are bringing our principles from term lending into the bridging sector,” Neale says. “ ere’s a product and instant terms, and if the information on the application is right, we can guarantee we will lend on that product at that rate. It replicates a term journey – open, honest and transparent.”
is, he says, will take brokers used to “doing deals” in the traditional way some time to get used to. But ultimately, it is about ensuring a “fair product,” which is naturally the direction the market is moving in, not least due to increasing regulatory scrutiny. Neale sees Quantum as being part of a cadre of “very good, ethical bridging lenders out there” that are at the forefront of improving the market, which ethical brokers will welcome.
He adds: “Do we want to be the biggest bridging lender out there? No. Do we want to disturb the bridging market? Absolutely.”
Culture is key
Underneath Quantum’s o ering is the drive to be an “open, honest, common-sense lender, which treats intermediaries with respect.” Neale explains that to provide this type of service as standard, a rm must ensure it has a good internal culture.
“One of the reasons we exist is to create a good place to work for talented, hardworking people,” Neale says. “We want people to thrive, make decisions themselves, and help intermediary partners.”
He highlights the importance of not just recruiting the right people, but having values that exist “not just on a poster,” and having management present on the “shop oor” in the day-to-day running of the company. He says: “We don’t hire ‘egos’ in this business, or look for corporate empire builders.”
Without working to targets or a speci c brief on representation, Quantum has built a team that consists of about 55% women and more than 30% people who identify as ethnic minorities, which Neale says speaks to the rm’s pledge to “respect individuality” and simply “hire great people to do great work – it’s not rocket science.”
Specialist future
No conversation about the future would be complete without the green agenda. is, Neale says, has been part of Quantum’s fabric since its launch. However, he suggests that there is still work to be done to gure out the right products to make the change needed across the market. For example, most green mortgages simply provide a discount for energy e cient properties. While valuable, this does not help improve lower rated stock, instead causing heightened demand for the small percentage at the top of the scale.
For Neale, the future will be about funding the cost of bringing properties up to standard – not least due to regulatory requirements. While products such as bridging will be part of the solution to this, more than anything, landlords need the Government’s expectations of them to be “set in stone.”
Beyond the impending urgency of green concerns, Neale concludes that whatever new development or disruption arrives, Quantum’s biggest lesson since its launch is “to stick to our core values and always remember why you’re doing something.” ●
The end of remote working?
Lately I’ve been hearing of ever more companies reducing their staff ’s ability to work from home. Both in the UK and globally, major industry players have announced that they’re scrapping the ‘hybrid’ model and staff are required back in the office. Boots, Amazon, and JD Sports are just some of a long, and seemingly ever-growing, list.
In my opinion, seeing some of the largest firms announcing such changes will make a difference once more to the UK housing market, and in turn the mortgage industry.
Back and forth
Prior to 2020, we were all so used to seeing season ticket loans, travel deductions and cycle-to-work schemes shown on client payslips.
Since 2020, however, this has all been rather scarce. The majority of office-based personnel usually mention how they are able to work remotely, sometimes only a ending the office once a month, or even less frequently for a quarterly meeting.
Nevertheless, with the shake-up to many company policies and senior management seeing the importance of in-person collaboration, we’re likely to see a change in housing demand again going forwards. I anticipate we’ll see more property coming up for sale that
isn’t within easy reach of transport links, and the demand will centre again around the proximity to train stations or key-road access.
With this in mind, those searching for a mortgage are likely to have increased costs, especially for transport. You might then also see a spike in the everyday spend, as well. No longer will they make a peanut bu er sandwich at home, but now £12 on a salad and coffee from Pret might become normal. This is coupled with increased travel costs; for example, an annual season ticket from Colchester where our head office is based to London Liverpool Street comes out at £6,404 currently on an annual basis, rather than paying monthly, which works out higher. A potential decrease in disposable income will make it harder to achieve the loan that’s desired.
Recently, we’ve had more lenders in our offices discussing how they’re increasing their income multiples this year. For those seeking a mortgage now – whether purchasing for the first time, moving home or a remortgage –the increase in lender multiples will be a welcome sight.
We might even see a shi on the remortgage reasons from capitalraising for home improvements such as a home-office fit-out, to increased amounts of debt consolidation where commuters put the he y travel bill on to a credit card if there isn’t workplace support in place.
Playing catch-up
This potential change on the horizon will be a key consideration for advisers when choosing a suitable lending option for clients, and those lenders that haven’t already increased their lending multiples, or become more accepting of debt consolidation, are going to need to catch up.
On the buy-to-let (BTL) front, we might see landlords continue to explore the more specialist type of
JONATHAN FOWLER is founder and managing director at Fowler Smith Mortgages & Protection
Lending multiples increasing will be a welcome sight, with potential increased travel costs and chilcare becoming normal yet again”
le ing – houses in multiple occupation (HMOs) and multi-unit freehold blocks (MUFBs) – as we potentially watch demand for renting rooms close to transport links steadily increase.
In this space, we’re seeing some lenders becoming more accepting of the corporate tenancy model, and I’m hoping more will follow as we’re potentially going to see some companies wanting to secure buildings close to their offices to rent to the workforce.
I’d like to see lenders continue to become more understanding of such costs, which for many will now be unavoidable. Lending multiples increasing will be a welcome sight, with potential increased travel costs and childcare becoming normal yet again for some clients.
Lenders naturally stagger their income multiples, based on household income, but I do wonder –especially if they’re aiming to have a substantial lending year – what else they’re able to do to assist the end-client to acquire a property, or even just switch lenders. ●
London’s mid-market
The first quarter of 2025 is almost over, and while the early indicators show a stronger-than-expected start to the year for many parts of the residential sector, it has not been without its challenges.
The property market and the broader economy have had to adapt to several major changes in recent months, not least the first Budget from a Labour Chancellor in a decade and a half.
In October last year, Chancellor Rachel Reeves announced several fiscal policies that plunged the UK economy into an era of uncertainty. Foremost was the decision to increase Government spending, which spooked the bond markets and sent gilt yields soaring to their highest levels since the late 1990s.
Growing concerns about a potential recession initially led to experts predicting that the Bank of England would tread more cautiously when it came to further interest rate cuts in 2025. However, the Bank has continued to cut interest rates, with its most recent cut from 4.75% to 4.5% in February.
Elsewhere, uncertainty comes from America in the form of Donald
Trump, who since returning to the White House has imposed he y trading tariffs on Canada, Mexico, and China, kicking off a trade war that has sent shockwaves through the global economy. Though the details are still being hammered out, Trump signaled plans to include VAT when calculating tariffs levied on the UK.
Keeping con dent
Despite these turbulent economic conditions, mortgage activity has been relatively robust, a surge in mortgage approvals in December boosted buyer confidence, and house prices remain strong.
Halifax’s latest index reported a monthly increase of 0.7% with annual growth reaching 3%, pushing the average price of property in the UK to a new peak of £299,138.
On 1st April the Stamp Duty threshold for first-time buyers will come down from £425,000 to £300,000, and given where average prices are, it’s highly likely to pull many more buyers into the taxable bracket.
Areas with the highest property values such as London have been experiencing a rush to beat the deadline, according to data from Rightmove. Analysis carried out by
the property listings site found that in London, just 8% of homes for sale will be Stamp Duty free for first-time buyers following the change.
Based on current levels of activity, we expect a spike in approvals in March 2025 as buyers aim to complete before the Stamp Duty threshold change.
Beyond Q1, it’s likely that remortgaging will dominate market activity this year, particularly as mortgage rates come down.
Following the recent interest rate cut from 4.75% to 4.5%, Bank of England governor Andrew Bailey gave a reasonably positive indication there would be future cuts, although he stressed that policy will be judged meeting by meeting in terms of “how far and how fast.”
Bank forecasts suggest a rise in inflation this year, peaking at 3.7% in the third quarter before returning to the 2% target. The wider effect of higher export costs to the US may feed into higher inflation, however, with any further base rate cuts made “sustainably.”
Open reform
Elsewhere, the Government has been working on making home buying and selling a faster and more efficient
has found its feet
process. Under new plans announced in February, it aims to modernise the way the process works in order to bring down the current delays of almost five months.
These reforms are set to open key property information, ensuring that data can be shared between trusted professionals more easily, driving forward plans for digital identity services, resulting in shorter transaction times, and ensuring that information is a lot more accessible.
There are also plans for a new Mortgage Guarantee Scheme to increase homeownership for young families and those stuck in the renting cycle. Details are yet to be announced, but will replace the existing mortgage guarantee scheme, which was due to expire this year – welcome news for first-time buyers in the capital, where larger deposits and higher loan-tovalues (LTVs) are required.
The signs point to 2025 being a buyers’ market, again suggesting a
healthier appetite for purchase and transactions further up the chain.
In London, there is a noticeable trend towards companies insisting employees return to office working. This is supporting demand and values, and we’re also seeing renewed interest from international buyers.
Despite relatively flat house price inflation in the capital, experts at Rightmove now predict London price growth to be in line with, if not marginally ahead of, national price growth in 2025.
Lower mortgage rates, so er pricing and a large number of households seeing their fixed-rate deals end in 2025 should all help to drive activity, not only across the capital but in the rest of the UK.UK Finance has forecast that there will also be gradual improvements in affordability, with remortgaging expected to grow by 30% to £76bn this year.
While in London affordability remains an issue, the outlook is
brighter than it was immediately a er the Budget in October.
Despite the underlying economic uncertainties, there is still a desire from buyers and investors to become property owners in the capital, and all the indications are that the London property market is set to go from strength to strength in 2025. ●
ROBIN JOHNSON is MD at KFH Professional Services
Integrated approach to homeownership
Affordability challenges and societal changes, mean that the homebuyer market is very different compared with what it was a generation ago.
Back then, people typically only took out a mortgage with their spouse or partner, while first-time buyers were largely younger couples or single professionals, both of whom would move up the property ladder as their careers progressed and families grew.
The situation is different now. Spiralling house prices, stricter affordability tests, and a cost-of-living crisis mean buyers are looking at more creative solutions to get on or move up the housing ladder, which may involve pooling resources with family, friends, or business partners.
The mortgage market is evolving to facilitate this, and Hinckley & Rugby has been leading the way by offering a flexible Core mortgage range, which can be adapted to suit the needs of a diverse range of buyers.
One of the most significant shi s has been the rise of multigenerational mortgages. There has been a significant increase in the number of parents and grandparents helping younger first-time buyers. This may be by gi ing funds for a deposit or
through mortgage products like Joint Borrower Sole Proprietor (JBSP) loans.
These loans can enable younger buyers to borrow more and access more affordable mortgage deals. They also ensure the parents’ or grandparents’ names aren’t on the property deeds, so the purchase doesn’t a ract higher second-home Stamp Duty charges.
This is one common use of JBSP mortgages, but it is not the only one. At Hinckley & Rugby, we have also seen these mortgages used by middleaged professionals to support older parents looking to remortgage.
This is supported by our Tailored Term feature, offered across our Core range products. This allows multiple applicants to share mortgage costs over different timeframes – ideal when there is a significant age gap.
For brokers, this enables them to tailor products to the needs of their clients, regardless of whether it’s the parents or the grown-up children who are the joint borrowers, without needing to access specific specialist standalone products.
But these aren’t the only uses for JBSP lending facilities in today’s market. They can also be a useful mortgage tool for couples following a divorce, where one party who may no longer live in the family residence continues to be a named borrower on the mortgage to help with affordability calculations. This can avoid the upheaval of downsizing into a smaller property, which may be a key consideration, particularly if children are involved.
It takes a village
With rental costs at an all-time high, we are also seeing an increasing number of mortgage applications from friends looking to buy a property together. These arrangements can allow those with different earnings potential to pool resources, escape the
LAURA SNEDDON is head of mortgage sales at Hinckley & Rugby for Intermediaries
There has been a signi cant increase in the number of parents and grandparents helping younger rst-time buyers[...]by gifting funds for a deposit or through mortgage products”
rental trap, and start building equity. Similarly, we have also arranged mortgages for siblings buying together and for business partners looking to invest in property.
Bringing JBSP into our core mortgage range and offering a tailored term as standard is designed to simplify things for brokers.
This means fewer silos, creating a more streamlined process for brokers to match borrowers with the right solutions, whether they are first-time buyers seeking additional help to get on the housing ladder, or borrowers who need a more innovative and flexible lending solution.
Hinckley & Rugby has been helping would-be buyers get the keys to their dream home for 160 years.
Evolving our core mortgage range will ensure we continue to offer suitable lending options to the next generation of homeowners. ●
Product transfers are only one solution
With circa 1.8 million maturing mortgage product terms occurring this year, borrowers should understand all the options available to them.
Over the past four years, brokers have been largely managing the job of helping clients – coming off very low rates – to cope with sometimes big jumps in their monthly payments. Where possible, households have absorbed higher repayments, choosing to stick with their existing lender on the same term via a product transfer and skip the affordability assessment. Not all have had that option, with rocketing bills over the past four years swallowing any spare disposable income they might have had.
Switching to part-and-part or to interest-only has helped some borrowers, but for many, the option to extend their term to spread repayments over a longer period has been the right course of action. This is likely to continue in 2025 and into 2026, where clients are coming to the end of 5-year fixed rates from a time when some rates were sub-1% for lower loan-to-values (LTVs).
With this in mind, there are a few things to think about. First is the recommendation of a product transfer versus remortgage. Product transfers have dominated the refinance market for the past few years, in part because of the economic environment a er Covid-19, and the impact of interest rates on stress testing. However, the base rate falling has eased the pain of affordability tests and increased the options available to borrowers.
Second, there is the issue of longer and shorter terms. Some borrowers will need to extend their terms,
necessitating a full remortgage affordability assessment, whether they stay with their lender or move to another. This is likely to boost remortgage activity this year. For some people facing payment shocks, extending the term is a key tactic for guaranteeing they can stay in their homes.
For customers who have the prospect of cheaper home finance, a shorter term may be required. Remortgaging to a lower rate than they’re on now could also bring monthly repayments down.
There will need to be careful conversations about whether to take that saving back each month, whether to use it to overpay up to early repayment charge (ERC)-free limits to minimise interest accrual, or whether to refinance and bring mortgage terms back down by as much as possible within the borrower’s affordability.
Talking terms
In any and all of these scenarios, talking to clients about protection is vital. Term assurance must reflect the new term of the mortgage, be that longer or shorter. It’s not o en something clients will consider, but it’s arguably even more important when agreeing to repay over 35 years rather than 30, for example.
It’s not just the term that is ge ing longer – the risk becomes higher, too. Where borrowers’ terms are extending into their 60s or 70s, the need for life cover is not just sensible, but necessary.
Talking about cover to pay off the mortgage should one partner die, where it is a joint mortgage and where there are dependants, whether single or joint, is a good opportunity to have a wider conversation about other forms of protection.
CRAIG HALL is director, strategic partnerships, nancial services, at LSL
Product transfers have dominated the re nance market [...] in part because of the economic environment”
Protecting income is a no-brainer for most borrowers, even where in the past they might have considered it too pricey. Factoring this or critical illness cover into affordability calculations at the point of refinance is something all brokers should be looking at carefully with their clients.
Working out how to cover costs may also feed into term extensions – that peace of mind is going to be worth paying for. Many brokers worry protection is a ‘hard sell’, but frankly, no mortgage advice should come without it.
Under the Consumer Duty, especially, advice is about good outcomes for borrowers. Giving them cost upon cost upon cost is likely to stress them out. However, doing the sums to consider the remortgage, term assurance and income protection that borrowers can afford – by adjusting the term – will offer much needed stress relief for borrowers.
If anyone was ever in any doubt why good advice is crucial for borrowers, 2025 offers a very clear example of why every refinancing option should be on the table. Brokers must be on the front foot with these clients, so no one misses out on the right deal. ●
Data is changing how we deal with complex risk
The National Audit
Office estimates that it will cost £16.6bn to carry out the necessary remediation of residential buildings over 11 metres in the UK. It’s a big number, and a lot of it is si ing on lenders’ balance sheets, whether they have quantified it or not.
While the Government has commi ed to funding around £9bn of that, paid by the Ministry of Housing, Communities and Local Government (MHCLG), the remainder will need to come from developer contributions and the incoming Building Safety Levy on new developments.
The Building Safety Act 2022 has allowed the ‘big six’ high street lenders to offer mortgages to borrowers whose properties have problem cladding, but they must meet certain criteria. The building must either have confirmation that it will be fixed by the developer through selfremediation, be covered by one of the Developer Remediation Contracts, the Medium Rise Scheme, or the Building Safety Fund, or be covered by the leaseholder protections in the Building Safety Act.
The Building Safety Act
Remediation and the Building Safety Act have resulted in thousands of borrowers being helped and not being trapped in mortgages; however, there are many thousands who are still unable to remortgage or sell.
Falling interest rates will take some pressure off for borrowers on standard variable rates (SVRs) while they wait for their homes to be designated as having unsafe cladding. In the meantime, they must continue to make mortgage payments. From the lenders’ perspective, this heightens
both the risk that the borrower defaults and that the asset value is far below book value.
This poses a prudential challenge, made more complex by the fact that there are so many unknowns and potential unknowns. Historically, this might have been explainable to regulators. Lenders, a er all, will have factored in contingencies relating to cladding. However, today the data is available at a granular level – we know, because we have it.
Among many, there are two things that lenders must give immediate and serious consideration to from a regulatory compliance perspective. The first is the requirement to assess back-book values as accurately as possible. The second is the Consumer Duty. Lenders must be able to show they are offering fair value to borrowers, particularly those who are deemed vulnerable.
What are customers trapped in homes they cannot sell or remortgage, if not vulnerable?
Finding a balance
Lenders are free to interpret the regulation in line with what’s appropriate for their business, and there is a difficult difference between aiding borrowers and lending responsibly. What they must do is be proactive in delivering good customer outcomes, rather than waiting for the Financial Conduct Authority (FCA) to intervene. The Consumer Duty also requires firms’ management and boards to use data to identify, monitor and confirm they are satisfied that their customers’ outcomes are consistent with the duty.
Pre-Consumer Duty, capital risk was the lender’s concern. PostConsumer Duty, there’s another perspective to take account of –
STEVE GOODALL is managing director at e.surv
borrowers’ exposure to asset value risk and the potential for foreseeable poor outcomes. This is both a challenge that is not going away any time soon, and an opportunity to get a really good grip on balance sheets.
This is one example of the power of data to inform and underpin meaningful decision-making for lenders. We now have the data sets that can inform be er decisions at this granular level.
This is not contained to one market.
The UK’s housing stock is a real mixed bag – some homes can be dated back hundreds of years, and with one in five homes over 100 years old, the UK has Europe’s oldest housing stock.
When it comes to non-conventional buildings, assessing value based on comparables takes arguably more skill. The experience of surveyors physically inspecting non-standard homes is vital, but there is increasing value in using widescale data analysis across the whole spectrum of homes that are a li le bit unusual. Access to that data is not openly available in the market, but that doesn’t mean it doesn’t exist. We know it does.
Data is fulfilling an increasingly important role in lenders’ ability to make the correct judgements about property and borrowers. Its provenance is therefore important. Sources you can trust are key, which is why we are developing so many data solutions. ●
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The impact of Stamp Duty on lenders
The upcoming changes to Stamp Duty Land Tax (SDLT) in England and Northern Ireland, set to take effect from April 2025, are poised to significantly impact the housing market, affecting both first-time buyers and existing homeowners.
According to recent research from Zoopla, these changes will increase the cost of buying a home for a majority of purchasers, with four in five homeowners now expected to pay SDLT, up from just under half prior to this deadline. As the Stamp Duty relief introduced in the 2022 mini-Budget comes to an end, it’s crucial for lenders to remain proactive in providing responsible mortgage options to mitigate this additional financial burden on buyers, especially in the higher loan-to-value (LTV) segments.
A surge in costs
From April, the reintroduction of the 2% SDLT rate for purchases between £125,000 and £250,000 will increase the financial commitment for buyers
across the board. Zoopla estimates that these changes will raise an additional £1.1bn in SDLT revenue annually. The proportion of first-time buyers required to pay SDLT will double to 42%, hi ing London and South East buyers in the £300,000 and £625,000 range the hardest.
With SDLT adding up to £15,000 in additional costs for some buyers, affordability will become an even more pressing issue for borrowers, particularly for first-time buyers and those with less equity in their existing properties. This increase in upfront expenses could even push many borrowers into a higher LTV bracket. For example, a first-time buyer purchasing a £500,000 property will see SDLT rise from £3,750 to £10,000, making it harder to maintain a lower LTV ratio and potentially leading to higher borrowing costs.
Risk and support
On a positive note, the latest Moneyfacts UK ‘Mortgage Trends Treasury Report’ charts an encouraging trend in the number of available high LTV mortgage deals, with 95% LTV products rising to 388 as of March 2025. However, these deals still represent only 6% of the market, highlighting the need for further support from lenders to ensure sustainable homeownership.
As affordability pressures and average wages continue to outpace inflation, with pay packets rising for both the public and private sector workers, lenders must find a balance between responsible lending and ensuring access to the market for this key buyer group. Expanding the availability of competitive high LTV mortgages, reducing upfront fees where possible, offering tailored affordability assessments,
DAVID LOWNDS is head of sales, marketing and business development at Hanley Economic Building Society
and common-sense underwriting approaches will all prove key factors in improving accessibility, supporting first-time buyers and ensuring a sustainable housing market moving forward.
Additionally, lenders can support buyers through specialised mortgage products such as Shared Ownership, Joint Borrower Sole Proprietor, and intergenerational lending options, which help supplement deposits and manage monthly repayments more effectively. Government schemes also play a crucial role in making homeownership more a ainable despite rising upfront costs.
By offering first-time buyers and second-steppers competitive, well-structured mortgage products alongside expert guidance from intermediaries – where the value of advice continues to grow – the industry can help mitigate the impact of SDLT changes and contribute to a stable housing market for all stakeholders. ●
The changing face of rst-time buyers
The mortgage market is evolving, and firsttime buyers (FTBs) continue to have the long-held ambition of owning their own homes – a goal that has been passed down through generations. While this remains a tough challenge for many in the current environment, the desire to become a homeowner is as strong as ever.
Our latest research shows that brokers are seeing growing demand from FTBs, but with this comes a shi in financial circumstances, borrowing pa erns, and homeownership aspirations. If lenders are to genuinely support the next generation of homeowners, they must adapt to these changing needs.
Eight in 10 (82%) of brokers have witnessed an uptick in FTB activity over the past year. This is positive news, particularly given the economic uncertainty of recent years. However, brokers also report that today’s buyers are steering a more complex financial landscape, with many struggling to fit the traditional lending criteria.
For instance, 31% of brokers have seen more buyers with fluctuating incomes, while 23% report an increase in self-employed borrowers. These figures reflect broader changes in the way people work – side hustles, contract roles, and self-employment are now common career paths. Yet, despite these shi s, many mortgage products and lending criteria remain geared towards those in full-time employment. If lenders fail to adapt, they risk excluding a significant and growing section of potential buyers.
Financial support is playing an increasingly vital role in helping firsttime buyers onto the property ladder. Almost a third (31%) of brokers have seen more first-time buyers combining finances with family to afford a home, while the same number report
a rise in buyers using Government schemes like Shared Ownership and Help to Buy.
These trends highlight the affordability challenges facing FTBs, reinforcing the need for lenders to provide more flexible and accessible mortgage options.
Flexibility and innovation
The message from brokers is clear: lenders must do more. Almost a third (31%) of brokers stress the importance of more innovative mortgage products that reflect the realities of modern borrowers. One in four (26%) also call for a more flexible approach to lending, recognising the broad range of needs among today’s buyers.
Transparency around application decisions (29%) and a more efficient application process (41%) are also high on the broker agenda.
Mortgage lenders have an opportunity – and responsibility – to drive positive change by reassessing their approach to affordability, risk, and product design. We must move away from rigid, one-size-fits-all models and instead offer solutions that cater to borrowers with diverse income streams, family support structures, and alternative routes to homeownership.
Recently, we introduced products designed to be er support those outside of the traditional nine-to-five working pa ern. Recognising the growing number of self-employed and freelance workers, these products are tailored to reflect the financial realities of today’s diverse workforce.
With a more flexible approach to income assessment, we aim to help those who may find it harder to meet the standard criteria for a mortgage, including those with fluctuating incomes or multiple income streams.
The role of lenders
So, what should lenders be doing? First, we must embrace innovation,
PRAVEN SUBRAMONEY is chief lending o cer at Nottingham Building Society
whether that’s through enhanced credit assessment tools, new income verification methods, or mortgage products tailored to the self-employed.
Digital transformation also plays a vital role – brokers are calling for faster application processes, and by leveraging technology, we can streamline underwriting and reduce delays.
Second, lenders must work more collaboratively with brokers. Regular updates on products (29%) and improved communication throughout the application process (27%) are areas brokers want to see improved. Transparency and responsiveness are key to ensuring borrowers have a smooth and informed journey to homeownership.
Ultimately, it’s about ensuring homeownership remains within reach for the new generation of first-time buyers. By broadening affordability criteria and adapting lending policies, lenders can be er support today’s FTBs – whether they rely on family assistance, have non-traditional incomes, or need more flexible mortgage options.
As the needs of first-time buyers evolve, so must the market. I am confident that by listening to brokers, embracing innovation, and offering greater flexibility, we can ensure the mortgage market keeps pace with the realities of modern homeownership.
In turn, we can help more people take their first step onto the property ladder today and in the future. ●
Shared Ownership: The path to a ordable homes
When I meet with our intermediary partners, I o en get a mixed reception when I wax lyrical about the many benefits of Shared Ownership, which can o en be misunderstood.
Some brokers regularly place Shared Ownership mortgages with us and are familiar with the solution it offers for lower income households, while others admit to feeling a li le confused about the benefits, and the cases in which it can help would-be buyers take their first steps onto the property ladder.
For aspiring buyers, this is the hardest time in living memory to get onto the property ladder. Shared Ownership schemes are one of the most effective ways to reduce deposit and affordability hurdles, making it possible to buy at an earlier age and to begin to grow their equity sooner.
However, we recognise the need to continue to improve the experience for shared owners, and that lenders, brokers and buyers alike must be fully aware of the nuances of the scheme. We’re pleased to be part of the Shared Ownership Council, which launched a pilot Code of Practice designed to improve information for buyers.
I’m passionate about the benefits of Shared Ownership and I’m pleased to be able to share the findings of a new report that we recently commissioned using market lending data. It reveals that Shared Ownership is more affordable than private renting in the vast majority of geographical areas. What’s more, due to capital repayments and house price increases, shared owners can be significantly be er off than private renters as a result of equity growth.
The model of part-rent, part-buy is widely accepted as the most effective for reducing the deposit hurdle, but the long-term financial impact compared to private rent is less well understood, and many brokers have preconceptions about what it means to be a shared owner. As one of the biggest Shared Ownership lenders, we want to help brokers and their clients to be er understand this tenure, and help put homeownership within reach of more people.
The research was carried out by industry experts Bob Pannell and Peter Williams and incorporates wholeof-market lending data. The report indicates that monetary gains for shared owners are significant. Of 294 local authorities, Shared Ownership is forecast to be more affordable than private renting in 93% of areas at year 10, rising from 77% in the first year. And across 83 ‘high rent’ local authorities, where rental payments make up over 30% of income, the scheme will be more affordable than renting in 98% of areas in 10 years.
Factoring in capital repayments and expected house price increases on the share purchased, based on conservative assumptions, shared owners would be on average £29,000 be er off as a result of equity growth, rising to £42,000 in London, in addition to incurring lower monthly costs. Coupled with the lower deposit requirements, the findings demonstrate the far-reaching benefits of Shared Ownership.
Currently, only the highest earning 10% of households can afford to buy an average-priced home of £298,000. However, the overwhelming majority of people in England aspire to buy a home. It is extremely important that we raise awareness among the mortgage community of the role
MARTESE CARTON is director of mortgage distribution at Leeds Building Society
Shared Ownership plays for low and medium income households.
Shared Ownership extends the promise of homeownership to more people and will make the majority financially be er off over time. At Leeds Building Society, we have continued to call for long-term solutions to the housing crisis facing renters and homeowners. We believe that increasing the supply of Shared Ownership homes could help the Government achieve its objectives to deliver 1.5 million new homes, as well as supporting more people into affordable ownership.
Maintaining a strong Shared Ownership sector is key, not least because it provides lower income households the flexibility to vary the size of property share purchased and alter their mortgage size and deposit.
This report provides new and significant evidence of the benefits of buying a Shared Ownership home compared to renting privately. The findings are another reason why we are proud to be part of the Shared Ownership Council, working alongside peers in the industry towards a shared ownership sector that is focused on progress, and enables more people to access this form of tenure.
Without any doubt, the majority of shared owners will be materially be er off by making this choice. I’d urge our partners across the industry to think about how they can raise awareness for this tenure, which can support aspirational first-time buyers and make homeownership dreams a reality for many more people. ●
Improving access to homeownership for skilled workers
CHRIS BLEWITT is head of mortgage distribution at Darlington Building Society
Since the Covid-19 pandemic, the shortage of skilled overseas workers in the UK has grown significantly. Many businesses and public sector offices have struggled to fill the gaps le by those who returned home and never came back, while the impact of Brexit on the employment market has also been widely felt.
The result of this has been slow and lacklustre economic growth across many parts of the UK economy, as firms continue to grapple with the challenge of trying to secure talented and skilled workers and spearhead business and economic growth.
While the shortage of healthcare workers in the NHS and social services sector has been relatively wellpublicised, the recruitment challenge facing other industries across the UK is less well-known.
According to the Government’s official shortage occupation list, engineers, web design and development professionals, chemical scientists and biochemists are all in short supply, while there is also a
desperate need to address the shortfall of vets, architects and lab technicians throughout the country.
In total, more than 300,000 work visas were granted in 2023 to overseas workers looking to move to and work in the UK, official Government figures show, with almost 70,000 skilled worker visas granted in the year ending June 2023.
Driving growth
A racting these skilled workers to the UK and helping them se le is imperative in addressing the skills shortage, as well as helping to boost productivity and drive economic growth.
Having the opportunity to buy a home plays a significant part in that, which is why Darlington Building Society recently moved to enhance its skilled visa mortgage offering, providing greater flexibility for borrowers previously constrained by the two-year rule, and opening up the possibility of buying a home to more skilled workers.
While there is o en an assumption that overseas workers are only in the
UK for a short period of time, this isn’t always the case. Many people on a skilled worker visa will live and work in the UK for the full length of their visa – a period of at least five years.
Many of these workers will also extend their stay or decide to permanently se le and make the UK their home, which provides a greater degree of stability when it comes to mortgage lending.
Providing more borrowing options for skilled workers to get on the property ladder will also help to alleviate some of the pressure felt in the private rental sector. It can also offer greater security to those skilled workers who have also had visas granted to dependants, and who are perhaps looking for more stable and secure living arrangements for their families.
To provide greater flexibility, Darlington Building Society has also relaxed minimum income requirements, to broaden access to borrowing for skilled workers and provide greater flexibility by accommodating more varied income levels.
With the goalposts for those on skilled worker visas constantly changing, broadening the scope of lending criteria provides greater flexibility and improved access to mortgage products for this key demographic.
For brokers dealing with this type of client, this means more mortgage options and increased support helping those on skilled worker visas achieve their homeownership aspirations regardless of the complexities associated with their visa status. ●
Many people on a skilled workers visa will live and work in the UK for the full length of their visa
Going green is stopstart for lenders
When we conducted the Mortgage Efficiency Survey, the green agenda was very much a lower priority. While back-book work and concerns about Scope 3 emissions were very much in play, the consumer facing agenda stalled. Many were awaiting more direction from policymakers.
This year is supposed to be when the long-awaited Future Homes Standard rules are finalised and implemented, but it’s not certain. The consultation between the previous Government and industry to hammer out the details of this regulation concluded in March last year, but the Government’s response has been postponed since.
According to the Future Homes Hub, both the final details and timeline are on hold while Ministers “consider how to ensure the standard is compatible with its wider objectives on housing.”
While not 100% confirmed yet, the Future Homes Hub said in January it is reasonably confident that it will see homes future-proofed with low carbon heating and high energy efficiency. No further energy efficiency retrofit work will be necessary to enable them to become zero-carbon over time as the grid continues to decarbonise. It’s also confident that the standard will include “an element of rooftop solar to deliver cleaner energy to households and protect billpayers.”
The Future Homes Standard will apply to new homes only, leaving existing homes as the elephant in the room. The transition to net zero is a huge undertaking for the UK’s housing stock, much of which is old and not constructed with energy efficiency in mind.
Added to this is the question of who foots the bill. In the private rented sector (PRS), landlords are mandated to upgrade properties let from 2028
to an Band C or higher. Housing associations and local authorities have also been given targets in the social sector. It is much harder to predict how the green agenda will play out in the owner-occupier market, where around half of homes are mortgaged.
Down to the details
We must think about it, though, because legislation is coming. After a groundswell of support for environmental action to combat climate change in the early 2020s, carbon reduction has become background music. It is still integral in lenders’ long lists of plans and obligations, but it’s now in the nittygritty of what actually needs to happen to achieve meaningful change.
Green mortgages haven’t taken off at scale yet, but the market is quietly growing. Halifax recently announced that Energy Performance Certificates (EPCs) will be factored into affordability assessments. There are now 60 green mortgages available, according to the Green Finance Institute, from discounted rates to cashback incentives and higher loanto-income (LTI) ratios.
At some point, the use of EPCs is going to become the norm. Lenders are already carrying out analysis of backbooks to ascertain their own exposure to climate risk and affordability.
For buy-to-let (BTL) lenders, there is already a material financial and regulatory need to have accurate and up to date EPC information for all loans on their books. Last year, the Bank of England set out changes to manage financial risks in residential mortgage collateral in the Sterling Monetary Framework (SMF).
The Bank said: “Since 2018, rental properties in England and Wales are required to have a current EPC rating of at least E – or a valid exemption – to be let out. To mitigate risks associated with non-compliant properties, the Bank is updating its eligibility criteria
STEVE CARRUTHERS is business development director at MSO Mortgages
for buy-to-let mortgages. Specifically, non-compliant mortgages will no longer be eligible as collateral in the Bank’s SMF operations.”
BTL mortgages originated after 1st August 2024 for which SMF counterparties do not provide EPC ratings will also be ineligible. Lenders aren’t obligated to remove noncompliant loans originated before this date from their back-books, but those won’t be included for collateral purposes. Ultimately, though these loans have a book value on the lender’s balance sheet, they become worthless as collateral to raise further funds.
Given the impending 2028 deadline, the incentive to lend against only the most energy efficient properties is clear. At the moment, these changes to eligibility criteria do not apply to owner-occupied mortgages. Which begs the question – when will they be?
Lenders are already thinking very seriously about this, as are valuers. Estate agents report that buyers are instructing more comprehensive surveys to assess energy efficiency and demanding that retrofit costs are knocked off the asking price.
The Government is consulting on reforms to regulation, EPC metrics and data management protocols. Under the previous Government, the now abandoned Minimum Energy Performance of Buildings (No. 2) Bill proposed that mortgage lenders ensure the average rating of their domestic portfolios is at least Band C by the end of 2030. Could some version of this remain on the cards under Labour?
Not all of this is set in stone, and details and dates remain hazy at the moment, but one thing is for sure: this is the direction of travel, and we all need to think carefully about our own roles in this transition. ●
Maximising HMO and mixeduse potential
It’s no secret that the modern UK buy-to-let (BTL) market is constantly evolving, with landlords increasingly looking beyond more traditional property types to maximise rental yields and diversify their portfolios.
Two asset classes offering significant opportunities in this sector are houses in multiple occupation (HMOs) and mixed-use properties. These investments deliver strong returns, but can require specialist financing and expert guidance, marking them as an important focal point for the intermediary market in 2025 and beyond.
Growing appeal
The HMO sector continues to generate some of the highest rental yields in the buy-to-let market. According to the Pegasus Insight ‘Landlord Trends Report’ for Q4 2024, landlords investing in HMOs are achieving an average yield of 7.0%. Similarly, those who own a whole block of individual flats (7.1%) and landlords with 11plus properties (7.1%) are also seeing strong profitability.
Beyond these robust yields, HMOs are expected to lead the way in rental growth over the coming months. Landlords anticipate average rental increases of 7.0% for HMO properties, the highest across all buy-to-let property types.
Notably, 39% of HMO landlords cited rent increases as a way to reflect the upgrades and improvements made to their properties, reinforcing the trend towards higher-quality shared accommodation.
The increasing demand for HMO investments is further supported by landlords’ future intentions. When asked about their plans to purchase
further buy-to-let properties in the coming months, many cited ‘expanding my portfolio with profitable HMOs’ as a key reason.
However, HMO financing comes with added complexity, including licensing requirements, fire safety standards, and planning permissions, with the advice process playing a critical role in helping landlords secure financing through specialist lenders that understand the nuances of HMO underwriting.
Beyond HMOs, mixed-use properties are also becoming increasingly attractive investment options. With limited housing stock and ongoing affordability challenges, landlords and developers are looking for versatile investment opportunities that blend residential and commercial elements.
A recent Knight Frank report, ‘From No Use to Mixed-Use’, highlights how London’s property market has moved away from single-use developments towards multi-functional spaces that combine residential, retail, and office components. Major regeneration projects such as Battersea Power Station, Elephant Park and Canary Wharf have successfully adapted to this trend, and upcoming projects in Euston, Southbank and Canada Water are set to continue this shift.
For landlords, mixed-use properties offer several advantages:
o Diversified income streams – combining residential and commercial rental yields enhances stability.
o Reduced void periods – strong demand for live-work spaces improves occupancy rates.
o Lending flexibility – specialist lenders are increasingly adapting their criteria to accommodate these investments.
GRANT HENDRY is director of sales at Foundation Home Loans
London’s property market has moved away from single-use developments towards multi-functional spaces that combine residential, retail and o ce”
Specialist lending matters
Recognising the increasing demand for non-standard buy-to-let financing, we have recently introduced our Property Plus and HMO Plus product range to support landlords investing in more complex property types. This offers more solutions for landlords with properties that do not meet traditional lending criteria.
We can now consider HMOs and a broader range of semi-commercial properties, including flats above shops, locations near business units, investor-only areas, and those affected by postcode concentration rules.
By partnering with lenders that fully understand the complexities of HMO and mixed-use lending, intermediaries can offer greater access to solutions that meet the diverse needs of landlords, enabling them to navigate complex cases with confidence.
Whether supporting first-time investors or seasoned landlords, the goal remains the same: empowering clients to secure the right solutions in a dynamic and progressive sector. ●
Raising standards and sustainability
The standard of privately rented homes is a key component of the sector’s hottest topic, the Renters’ Rights Bill. Legislation that ensures tenants live in safe, comfortable homes is something we wholeheartedly support, and landlords have been delivering.
Government data shows how the standard of privately rented homes has improved significantly over the past 15 or so years.
In 2005, 47% of private rented sector (PRS) properties were classed as ‘non decent’ according to the English Housing Survey (EHS). By 2023, this figure had fallen to 21%.
The improvement of PRS stock quality corresponds with an increase in buy-to-let (BTL) investment. Industry figures show that the number of outstanding buy-to-let mortgages grew from one million in 2010 to just under two million by October 2024.
Lending on poor quality properties presents credit and reputational risks for lenders, and the surveying and underwriting used to mitigate this is an important tool in driving up standards in the sector.
First-rate properties
Landlords tell us that they target properties in need of improvement and spend substantial amounts rejuvenating them, which challenges the outdated view that privately rented homes are second-rate.
Yes, improvements can increase capital value and rental income, but landlords are also motivated by the need to attract and retain good tenants. Many operate their portfolios as long-term businesses, recognising that a well-maintained property helps to create positive landlord-tenant relationships.
With Labour launching a consultation on Minimum Energy Efficiency Standards (MEES) in
February, the transition to a greener rental sector is another aspect of PRS regulation on the agenda...again.
Proposals have been put forward that would require all privately rented properties let under new tenancies to achieve an Energy Performance Certificate (EPC) rating of Band C or above by 2028. This obligation would extend to existing tenancies by 2030.
With the consultation concluding in May, and reform of the EPC system scheduled for 2026, the issue will continue to gather momentum in 2025 and beyond.
While the potential rule changes bring uncertainty that may mean some landlords are hesitant to undertake upgrades, we know that many have been improving their portfolios long before the latest focus.
We see this in our lending data, with the proportion of loans on our book for properties with EPC ratings of A to C increasing to 53%. EHS figures show that this trend is evident across the wider market, too. Between 2013 and 2023, the proportion of EPC A to C properties more than doubled, from 23% to 48%.
Nevertheless, with the tenure making up almost 20% of UK households, almost three million properties need some level of green energy retrofitting.
If the policy becomes law and is enforced from 1st January 2026, that leaves 504 working days to 1st January 2028 and 1,008 to 1st January 2030. Dividing the number of PRS properties estimated to be below EPC C (2.99 million) by 504 days reveals that 5,934 properties would need to be upgraded every day to meet the proposed 2028 deadline. Dividing by 1,004 shows that 2,978 homes would require retrofitting by 2030.
Time and money
Of course, these calculations are based on assumptions, but they give weight to our view that the timescales
LOUISA SEDGWICK is managing director of mortgages at Paragon Bank
These opportunities will diminish if the rules are too punitive and act as a barrier to investment”
proposed are unrealistic. The Government estimates that necessary enhancements will cost between £6,100 and £6,800 per property, and the consultation highlights the financial support that would be available to landlords.
The actual cost will obviously vary, and grants are subject to eligibility, so it’s likely that landlords will also need to explore finance options.
Interestingly, Paragon research shows that almost six in 10 landlords haven’t commissioned EPC assessments after enhancing properties. This means that they could potentially miss out on the preferential rates Paragon and other lenders offer for properties with higher sustainability credentials.
Additionally, it’s estimated that around 60% of PRS properties are owned outright, suggesting that there may well be asset rich, cash poor landlords who could use equity to borrow funds needed to finance upgrades.
This highlights how a shifting legislative landscape can provide opportunities for the sector.
But these opportunities will diminish if the rules are too punitive and act as a barrier to investment. This is why we’re actively engaging with politicians, highlighting the need for legislation that benefits landlords as well as tenants. ●
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Interest in HMOs is not going anywhere
Houses in multiple occupation (HMOs), and to a lesser degree, multi-unit freehold blocks (MUFBs) remain a core element of UK housing stock, and in recent years many existing landlords have looked closer at this sector, particularly in a period where tenant numbers have risen and multitenanted properties have become much more in demand.
Interestingly – and perhaps quite surprisingly, given the disconnect between tenant demand and supply in the private rental sector (PRS) – the last figures we have from the Office for National Statistics (ONS) back in February 2024 revealed that the number of HMOs in the UK (476,076) was down 9.5% from 2018.
Now, there are many potential reasons for this, not least in terms of the potential for HMOs to mean greater costs for the landlord in terms of upkeep, sourcing tenants, local authorisation and registration, mortgage costs, etcetera. However, from the conversations we have with both advisers and landlords, there is a growing interest in HMO business and transactions, particularly due to the potential for greater rental yields.
Our own recent Fleet Mortgages Rental Barometer continues to show rental yields across England and Wales performing strongly. For Q4 2024, the average yield across the regions we lend in was 7.4%, but this was only up 0.6% on the previous year, and even with demand still outstripping supply, there is a general feeling that yields are less inclined to outperform year-onyear going forward.
This may leave some landlords looking at their options when it comes to purchasing and holding properties that are going to deliver a stronger yield. This once again leads us to HMOs, because of course, you have multiple tenants within a property on
separate tenancy agreements, which can often deliver a much higher yield than, say, offering the same property to a family.
That being the case, we’ve not just seen landlords looking to add HMO properties to their overall portfolios – particularly relevant in university towns and cities, but also increasingly for the professional market where younger people are much more likely to live together in this way – but we’ve also seen landlords seeking to convert their existing properties into HMOs. However, for those who have never prepared, offered, or indeed purchased, an HMO before, the move can seem a little daunting. There are many additional factors to take into account, such as dealing with those multiple tenants, what should be included in the shared facilities, stricter regulations, and the additional safety and maintenance standards required to meet the terms of any license.
Keeping on top
Of course, we can’t discount the different financing options, pricing, rates, and criteria that often come with HMOs or MUFBs, from different lenders. As advisers, it’s clearly important to be on top of these, particularly in terms of your client’s understanding of the differences with HMOs, but also with regards to the different – often more costly – pricing that such mortgages tend to have.
If this all sounds like it could put off a landlord – especially those considering the HMO market for the first time – then there are means by which you as the adviser can make things less complicated for them, while at the same time also potentially delivering them cost savings, both upfront and over the term of the mortgage. You might wish to ask the landlord, ‘When is your HMO not an HMO?’ I don’t mean in the sense of the property itself, but in terms
WES REGIS is national account manager at Fleet Mortgages
of whether it meets the criteria of an HMO for mortgage purposes.
For instance, at Fleet we can look to accommodate ‘HMO’ cases where there are four tenants or fewer in a property, but which has, for example, locks on the doors and separate tenancy agreements, not on our specific HMO products but on our standard range – providing that no HMO license is required for the current or intended occupancy.
This would mean lower rates, but also the ability to secure free or discounted valuations, which are not available on our HMO product range, providing an upfront saving and cheaper financing over the term.
It’s important for the landlord to know that this doesn’t make their property any less of a HMO in terms of the wider requirements that come with offering such properties, but it simply means that – for their mortgage purposes – they may have other, more standard, options beyond the specific HMO or MUFB range, which tend to be priced higher.
Overall, it seems likely that more portfolio landlords will, at the very least, be looking at the options available to them in the HMO space.
To that end, it might not need a specific HMO mortgage option, as such, but could potentially be accommodated elsewhere depending on number of tenants or the property set-up. If, however, an HMO product is definitely required, then there are a growing number of HMO mortgage options available.
Landlords are increasingly wellcatered for in this space, and we anticipate the growth in interest and activity for HMOs is not going away anytime soon. ●
Buy-to-let investment: Stick or twist?
Things haven’t exactly been looking up for landlords. Unlike other small businesses which claim tax relief on all running costs, landlords can no longer deduct mortgage interest from their income before tax. Then, the raft of regulations governing evictions and health and safety expected to come in with the Renters’ Rights Bill are likely to further increase the pressure, while they may also have to invest significant sums in upgrading their properties’ energy efficiency.
With interest rates back to more typical levels and house prices remaining high, meeting affordability requirements remains challenging. Landlords could be forgiven for throwing in the towel, and indeed some have, though the general view is that the much-mooted exodus has not yet materialised.
We’re seeing positive signs that those who remain are finding new ways to make property investment work, and we believe landlords deserve a helping hand. In our Home Improvements policy paper, launched at a Parliamentary event last October, we called for industry and Government action to create a more level playing field for landlords.
Recognising the vital role landlords play in providing much-needed private rented accommodation, we want the new tax rules reviewed to bring them back in line with other small businesses. We also called for greater clarity over energy efficiency requirements. However, since then the only change has been negative – with the Budget increasing the 3% additional Stamp Duty rate to 5%.
Landlords are a hardy bunch. Zoopla’s ‘Rental Market Report’
for December 2024 concludes that “the peak of the landlord sell-off is now behind us,” suggesting that landlords are likely waiting for when “conditions look right” – lower base rates and higher yields – to increase their investments.
Recent developments have caused landlords to reflect on how serious they are. What we’re left with is those who always saw property as a long-term enterprise, prepared to take the rough with the smooth, and professionals with larger portfolios, a commercial approach and foresight.
The minority who fell into letting by accident either by inheriting, having surplus property after forming a relationship, or deciding to rent one they couldn’t sell in the Credit Crunch, are the most likely to have left.
Where brokers come in
So, what are the success factors for those looking to stay, and how can brokers support them? If an existing landlord, when did they last review their property’s potential? Is there scope to increase their pricing? Many small portfolio or accidental landlords are reticent about charging tenants more. However, like any business, getting pricing right is vital. Every extra £50 or £100 on their yields could make the difference between securing a new deal or not.
While rates are higher than they have been for some time, some landlords have purchased property in cash to save money.
It is worth all rental property owners considering whether they have explored all possibilities to release capital from any unencumbered properties they might own, to grow their portfolios. Or, could they potentially release equity to
GURPREET CHAHAL is corporate account manager at Accord Mortgages
future-proof their rentals by making improvements?
Have they really thought about what their objective is? For example, is it about monthly income, longterm capital growth to support their retirement, or a mixture of both? While the current picture might seem quite bleak, going through this thought process create a more objective view. They might even be pleasantly surprised what this reveals when compared to other types of investment, including savings. What could their property be worth in five, 10 or 20 years, and what would this mean for them and their life plans?
Landlords could see the new Income Tax rules as a positive opportunity to invest in renovating to future-proof, and even add to the value of their property, the cost of which they can still offset against income. How much could they potentially add to the value by doing this?
Zoopla suggests some rebalancing of supply and demand, although the mismatch that still exists is likely to be enough to maintain some upward movement in rental costs. It comes down to individual choice, of course, and is all about landlords weighing up how much they must invest to make letting worthwhile, as well as considering opportunities to diversify into other areas and property types. Ultimately, while there might be higher costs to stomach now, the strong demand and rental yields we’re currently seeing, coupled with the likelihood of longer-term increases in value, suggest there are undoubted benefits to be had. ●
Flexibility and speed with second charge
One of the many advantages of taking out a second charge mortgage is the speed at which the funds can be provided to the borrower. This makes them a useful and effective capital-raising tool in situations where the borrower needs to access funds quickly.
Taking out a second charge mortgage is often much faster than remortgaging. This is mainly because the application process is more streamlined than applying for a standard mortgage, and the loan amounts are often smaller.
An additional benefit of applying for a second charge mortgage is that there is typically no need to enlist a solicitor to carry out any legal and conveyancing work, as the majority of second charge applications are conducted by brokers who directly liaise with lenders.
This, coupled with the fact that physical valuations are also not generally needed – as an automated valuation model (AVM) is usually more than sufficient – helps to prevent any back-end delays and allows funds to be released more quickly, saving both time and money.
Second charge mortgages have grown in appeal over the past few years as the higher interest rate environment saw consumer affordability challenged for the first time in over a decade.
This led to brokers and their clients seeking an alternative capital-raising solution to remortgaging, and quickly realising the benefits of a second charge loan as a swift and flexible way of tapping into the equity in their home without having to touch their first charge mortgage.
Demand in the sector remains high, with new business volumes growing 17% in November 2024, according to the Finance & Leasing Association (FLA). In fact, the FLA recorded
growth in the second charge mortgage market during every month in 2024, as borrowers sought to capitalise on the speed and efficiency of this capitalraising tool.
One of the most common reasons why a borrower takes out a second charge mortgage is to consolidate debt. However, there are a number of reasons why a borrower may need a swift cash injection, such as to carry out a home renovation, help a family member purchase a property, or pay a tax bill.
Given the ongoing popularity of the product and the continued demand for speed and efficiency, it is little wonder that there have been a number of enhancements to the criteria used to assess second charge applications, allowing for quicker completions.
This includes using enhanced home track rules, which reduces the need for a full valuation on the property being used as security. Online identity checks also eliminate the need to wait for signed direct debit and application forms to be returned to the broker, further accelerating the process.
Another recent enhancement is that completions can also be achieved with consent to follow, meaning lenders can make a conditional offer when consent from the first charge lender is the only thing outstanding.
Greater efficiencies across the second charge mortgage market mean approvals can now be secured in record time, often in a matter of days.
For example, Norton Broker Services recently completed a £60,000 deal with Pepper, in which a case was sent to the bank on a Friday after receiving the outstanding documents. A binding offer was issued that same day, with the case completing the following Monday at 11am.
In another case, this time with Norton Home Loans, the application was packaged and sent to the lender on 7th January, with the binding offer received less than 24 hours later.
EDDIE LAU is broker account manager at Norton Broker Services
Greater efficiencies across the second charge mortgage market mean approvals can now be secured in record time, often a matter of days”
In both cases no valuation was required, helping to streamline the process and allowing the borrower to access funds quickly.
A £25,000 home improvements application to Interbridge was submitted, with the binding offer issued later the same day.
The speed of execution and expertise of those involved in the case enabled this particular deal to be completed with absolute certainty and minimal friction.
While some cases may take a little longer, securing a second charge mortgage in a matter of days is now commonplace in today’s market.
As a result, for borrowers looking for a fast and flexible option to raise funds, a second charge mortgage may be worth considering to help them get the funding they need within a short timeframe. ●
Second charge lending and tech transformation
The second charge mortgage market is in the midst of significant growth, presenting both opportunities and challenges for the intermediary market.
Recent analysis by Pepper Money suggests that more than 42,000 households could take out a second charge loan this year. If this growth trajectory plays out as expected, the sector will have expanded by nearly 39% over two years, reflecting a rising appetite. Data collected from the OMS end of year figures also shows an increase in second charge completions through the intermediary market, with second charge lending accounting for 10.65% of all lending through OMS in 2024, increasing from 9.17% in 2023.
In addition, recent data from the Finance & Leasing Association (FLA) showed that new second charge mortgage business volumes grew by 17% in November 2024, with the value of new loans increasing by 29%. In the three months to November, there were reported to be 9,686 agreements totalling £476m, up 26% by volume and 35% by value compared with the same quarter in 2023.
On an annual basis, second charge lending rose 16% by number and 22% by value in the 12 months to November compared with the previous year.
This lending surge underlines its growing importance within the broader mortgage landscape, particularly as homeowners explore alternative borrowing options.
Gaining popularity
Second charge mortgages are increasingly being used as a viable alternative to remortgaging, especially for homeowners locked into highly
competitive longer-term fixed rate deals.
Many borrowers are now seeking second charge loans for purposes ranging from debt consolidation to funding home improvements, rather than incurring the costs and potential rate increases associated with remortgaging. This trend is bolstered by increasing consumer awareness of second charge solutions, and the flexibility they offer in managing existing financial commitments.
Additionally, the Financial Conduct Authority (FCA) has recently reinforced the need for quality advice in second charge lending. The regulator highlighted concerns about some firms failing to fully assess whether a secured loan is appropriate for customers in financial difficulty.
Under the Consumer Duty framework, intermediaries are expected to ensure their clients understand the full implications of second charge borrowing, including repayment costs and long-term affordability.
This further highlights the critical role of brokers in educating and guiding clients through their options and making informed decisions.
Streamlined solutions
As the second charge market expands, tech solutions and platforms are helping to streamline application workflows, reducing manual processes, and enabling brokers to source the most suitable products for their clients more effectively.
OMS has launched a pilot for Second Charges Quick Quote, an instant sourcing platform designed to enhance efficiencies across the second charge mortgage sector. The pilot, in collaboration with Pepper Money, Selina Finance and Interbridge, aims
NEAL JANNELS is managing director at One Mortgage System
Second charge mortgages are increasingly being used as a viable alternative to remortgaging”
to refine the platform ahead of a full industry rollout.
This platform allows brokers to receive instant lender quotes, providing real-time comparisons without the need for a full decision in principle (DIP).
This innovation significantly reduces the time required to research and source second charge mortgage options, ultimately delivering better value and a smoother experience for both brokers and their clients.
The future
Looking ahead, the second charge sector is well-positioned to build on its impressive growth trajectory.
With an increasing number of lenders showcasing innovation and adaptability in response to shifting market conditions, second charge loans will continue to be a valuable tool for intermediaries, enabling them to offer competitive and responsible lending solutions.
Technology will play an increasingly prominent role in this evolution, by further enhancing the client journey and helping intermediaries position themselves as trusted advisers in a progressively complex mortgage landscape. ●
Opportunity
What do second charge mortgages and underwriting mortgages for customers
with second jobs have in common?
Other than both including the word ‘second’, they also both represent growing opportunities for brokers to support their customers.
With rising living costs and shifting financial priorities, more borrowers are either supplementing their income with additional employment or seeking flexible borrowing solutions to manage their expenses.
This is supported by customer research from the latest Pepper Money Specialist Lending Study, alongside broker search data from One Mortgage System (OMS).
Second jobs
Findings from the 2024 Pepper Money ‘Specialist Lending Study’ reveal that 7.34 million people in the UK are now earning income from more than one job – a notable increase from 5.77 million in the previous study.
The cost-of-living crisis is a key driver behind this trend, as more individuals seek additional sources of income to manage expenses.
The study highlights that this shift is particularly prominent among younger adults, with a quarter of 18 to 24-year-olds and nearly the same percentage of 25 to 34-year-olds supplementing their primary income through secondary employment. Meanwhile, the trend is also growing among older demographics, showing that financial pressures are affecting people across all age groups.
This rise in multiple income sources aligns with data from OMS, which shows an increasing number of mortgage applications citing second jobs. In 2023, 11.81% of applications included a second job, a figure that rose to 12.34% in 2024.
The increase has been particularly pronounced in the latter part of 2024,
RYAN BRAILSFORD is business development director at Pepper Money
with notable month-over-month spikes, including a 64% rise in September and a 55% increase in October.
Second charge mortgages
Alongside the trend of multiple jobs, demand for second charge mortgages is also growing. According to OMS, completions of second charge mortgage products increased by 33% from 2023 to 2024, making up 10.65% of total completions last year, compared to 9.17% the previous year.
The latest findings from the Pepper Money ‘Specialist Lending Study’ have provided insights on the reasons why customers choose to take a second charge mortgage.
Home improvements and debt consolidation remain the most common reasons, accounting for more than half and nearly a third of second charge mortgages, respectively, but other motivations are emerging. For example, 13% of respondents say they would consider a second charge to cover education costs, with this figure rising to 23% in London.
Additionally, a growing number of people say they would use a second charge mortgage to help family members with deposits, invest in additional properties, or even fund business ventures.
As customer circumstances become more diverse, brokers must ensure they’re working with lenders that can
knocks–twice
More borrowers are either supplementing their income with additional employment or seeking flexible borrowing solutions”
provide solutions for a wide range of financial needs.
Borrowers today have highly varied requirements, and emerging trends are covering entirely different aspects of the market – from the rise in multiple income streams to the increasing demand for second charge mortgages.
Not every lender is equipped to fully appreciate additional sources of income to boost affordability, and few offer second charge mortgages as part of their product range. That’s why it’s crucial for brokers to collaborate with a broad range of lenders, particularly those that have the breadth of offering to cater for these evolving needs.
According to Moneyfacts, we’re approaching 10,000 mortgage products available to brokers. It’s increasingly important brokers utilise platforms, such as OMS.
A specialist lender like Pepper Money stands out by offering a comprehensive approach, bringing together solutions for these diverse requirements under one roof.
By working with lenders that understand the full financial picture of a customers, brokers can help customers secure the most suitable mortgage products – providing a more seamless and efficient borrowing experience.
Those brokers who stay ahead by aligning with adaptable, forwardthinking lenders will be best positioned to support their customers in achieving their homeownership and financial goals. ●
View from the market
Dale Jannels, chief executive officer at OMS:
As a technology company working with both intermediaries and lenders, we see first-hand how borrower circumstances are evolving in response to economic pressures. The latest findings from the Pepper Money ‘Specialist Lending Study’, combined with our own search and application data, highlight two key trends brokers must be aware of: the rise in second jobs and the growing demand for second charge mortgages.
Affordability remains a major challenge for borrowers. With more than seven million people now supplementing their income with a second job, lenders must recognise this additional income when assessing mortgage applications.
We are also seeing second charge mortgages becoming a crucial tool for borrowers looking to manage their finances.
Are technology companies doing enough to provide brokers with the tools to source and offer this as an option to customers every time? Some are!
As brokers, our role goes beyond securing mortgages – we have a duty to support, educate, and guide our clients through these difficult times. This has always been a broker’s priority, but with Consumer Duty, it is more important than ever.
People remember who helped them when times were tough, and by working with lenders that truly understand affordability and offer flexible solutions, we can build trust, provide real value, and strengthen long-term client relationships.
Adapt, evolve, succeed: AI and later life lending
The traditional view of equity release and lifetime mortgages as solely an option for retirees is no longer the reality. Borrowers are turning to these products earlier in life, o en in response to major financial shi s such as divorce or restructuring. As borrower needs evolve, lenders must be ready to adapt.
The Equity Release Council’s (ERC) Q4 & FY 2024 lending data has sparked fresh conversations across the sector. While the headlines for Q4 were positive, the annual figures tell a more cautionary story. Equity release lending, once a thriving sector, has seen a decline, with total lending in 2024 expected to be between £2.2bn and £2.3bn – significantly lower than its £6.2bn peak in 2022.
At first glance, this might suggest weakening demand, but the reality is more nuanced. While overall lending volumes have dipped due to economic uncertainty, high gilt yields, and increased regulatory scrutiny, the profile of borrowers is evolving.
The market is witnessing a shi towards younger borrowers – in their late 50s and early 60s – who are increasingly using products for financial restructuring rather than simply supplementing retirement income. This signals a broader shi in how these products are perceived and used – as a proactive financial tool rather than a last resort.
For lenders, this shi presents both opportunities and challenges. The challenge lies in serving an evolving borrower base while maintaining compliance and managing affordability risks. Traditional methods of verifying income and financial stability are becoming unfit for purpose. Borrowers now present
more diverse financial backgrounds – multiple income streams, pensions, investments, property wealth. What was once a relatively straightforward process has become increasingly complex.
Managing risk
Consumer Duty has placed greater emphasis on robust affordability checks, but manual verification methods continue to slow down the application process. Right now, lenders can spend over 30 minutes per application manually reviewing income and affordability, increasing the risk of human error while creating bo lenecks. In a competitive market where speed and accuracy define success, the need for a more efficient, technology-driven approach has never been greater.
This is where artificial intelligence (AI) document processing is making a real difference. Lenders can streamline income verification, enhance compliance, and significantly reduce the time it takes to assess affordability.
Through automated affordability and income assessments, employer verification, and document integrity checks, lenders can process applications with greater speed and accuracy. A process that once required manual document reviews is now handled in real-time, allowing lenders to extract and verify information from bank statements, payslips, and tax returns instantly. This not only improves operational efficiency but strengthens fraud prevention and compliance measures.
Approaching a ordability
As affordability remains a key concern for borrowers, later life lenders must also consider how
ALEXIS ROG is CEO and founder at Sikoia
to improve the overall customer journey. Complex processes can deter potential borrowers at a time when they need support the most. AI-driven automation reduces friction and removes unnecessary delays. Customers benefit from faster decisions, greater transparency, and a more personalised lending experience. With traditional mortgage lenders hesitant to expand into the later life market, specialist lenders have a unique opportunity. Those that integrate innovative tech into their onboarding and underwriting processes will not only gain a competitive edge, but be be er equipped to support borrowers with increasingly complex profiles.
The road ahead is clear. While lending figures remain below pre-2022 levels, the long-term growth potential of the market remains strong. Many older homeowners have substantial property wealth that could be put to work in managing their finances, restructuring debt, and supporting the next generation through intergenerational lending.
The demand for later life lending solutions will continue to grow, but only those lenders that embrace digital transformation will be able to meet it effectively. By empowering lenders with faster, more accurate loan processing with help of AI-powered document processing solutions, and seamless automation, we can build a more efficient and scalable later life lending market. The firms that recognise the value of AI today will be leading the industry tomorrow.
Later life lending must evolve, and so must the tech that supports it. Those that adapt now will shape the future of the sector. ●
Oranges are not the only fruit
When it comes to the issue of affordability, there is effectively nothing new to see if you are a mainstream mortgage adviser. The nature of the job is about determining whether the customer can afford the mortgage over a period of time based on their financial position, what they want to achieve and where they want to go. Of course, you’re reviewing affordability right across the piece before coming up with a recommendation for your client.
However, when it comes to older borrowers – and specifically in the realm of lifetime mortgages –affordability has not been the go-to assessment that it will have been for those operating in the mainstream.
The simple fact being that, traditionally at least, when it comes to assessing older homeowners and whether a lifetime mortgage was right for them, advisers didn’t need to assess their ability to pay back the loan over the term.
Almost all lifetime mortgages on the market came with roll-up interest, meaning these products suited – and still do suit – those older homeowners who didn’t have the ways or means, or want, to be able to keep making any sort of repayment or interest payment.
That was then – and as mentioned, these products still have their place in the market – but we must now acknowledge that these types of lifetime mortgage ‘oranges’ are ‘not the only fruit’ available, and instead advisers have a much wider array to choose from, with some significant benefits for those who can, and want to, make payments.
In the past year or two, we’ve seen a growing number of product providers in the later life lending space, including more2life, offering a variety of products where the customer can choose to pay some,
or indeed all, of the interest on their lifetime mortgage. Not forge ing those product options which fit more within the mainstream sector, such as retirement interest-only (RIO) or those that offer mortgages to older borrowers just prior, or into, retirement. With these products now readily available, the ability to assess affordability should be a mandatory part of the adviser’s role with older borrowers, especially in that lifetime mortgage space where there are clear benefits to be had. For example:
To be able to control the roll-up of interest for the benefit of the customer’s estate.
To be able to control the roll-up of interest to protect the equity in the home, which may allow them to use the asset further in the future should they need to.
To potentially pay a lower rate of interest, which will benefit both of the above as well.
Three incredibly important points, especially because without an assessment of affordability, advisers are effectively ‘giving up’ the range of products which fit this particular bill – which offer the ability to pay something in the first place, which will have an impact on the overall loan amount, which will have an impact on the amount of equity le in the property, which will allow access in the future, which will result in a lower interest rate which again will temper some, or all, of the roll-up.
At more2life, we’ve certainly seen the benefits of such a product offering, and continue to deliver a growing number of Interest Reward products for those individuals who can, and want to, pay an amount of interest during their term.
It’s difficult to ascertain the potential savings that could be accrued over any period of time without looking at a specific individual case, but the reality will be that any interest payment
DAVE HARRIS is CEO at more2life
from the customer will have a positive impact, because it will of course slow that roll-up procedure, allowing the customer to access that equity now and still benefit from house price inflation in the years to come.
Good outcomes
There is, as always, a regulatory aspect to all of this, placed within the context of Consumer Duty and the adviser’s ability to deliver a positive consumer outcome. Again, to further emphasise, if as a later life lending adviser you are not conducting a thorough affordability assessment, then without doubt, you cannot be certain that the product you have recommended is the right one. That is a fact, and it should be considered with every single client.
We understand that assessing affordability requires a process and strategy – what to include in terms of income, needs and wants – but we at more2life are here to help advisers with this, via regular webinars and information which can outline exactly what does need to be considered and where the results might take you and the client.
At the end of the day, without it, you are effectively flying, if not blind then certainly with one eye closed. Ultimately it will be your customer, and potentially you as the adviser or firm, who will suffer from this.
Good, positive outcomes are at the heart of Consumer Duty, and without a full affordability assessment of every older borrower, without access to all the products available to this demographic, and without knowing exactly what the financials say and where they should take the recommendation, the adviser’s ability to deliver this for a client is severely compromised. ●
Exploring later life lending in 2025
The later life lending market is showing promising momentum as we move through 2025, with the latest figures from the Equity Release Council (ERC) highlighting a steady recovery and positive growth in the sector.
The data shows more than 15,000 customers in Q4 2024 engaged with the lifetime mortgage market – the first time this figure has been breached in over a year – marking a notable resurgence in activity. In total, lending increased for the third consecutive quarter, reaching £622m – up 16% from £525m in Q3 2024.
This upward trend in sales growth is great news for the later life lending market, which has seen sales plateau in recent years due to increased economic uncertainty.
However, with interest rates slowly falling and consumer confidence starting to return, the next 12 months look to be more promising for the sector.
One of the key drivers for growth has been the evolution of the market and the introduction of more innovative and diverse later life lending solutions.
This includes products like Interest Reward lifetime mortgages that focus on improving borrower affordability by allowing the borrower to pay some or all of the interest each month.
One of the many benefits of this type of product is that it enables later life lending borrowers to access a
be er rate and prevent interest rolling up, either entirely, or at a much slower pace. For some, these innovations have made later life lending a more a ractive and sustainable option by providing them with greater financial flexibility.
Other products such as retirement interest-only (RIO) mortgages and mainstream mortgages for older borrowers have also gained significant traction over the last few years.
This has also opened up the market to a broader pool of borrowers by appealing to those seeking products that align with income and affordability rather than property income.
Security and a ordability
As the market continues to evolve, 2025 has the potential to be a great year for the later life lending sector.
With more lenders starting to focus on developing solutions that balance financial security with affordability to appeal to a greater number of borrowers, it is likely more people will start to explore the options available in the market.
This presents an opportunity for advisers to consider whether they are in a position to offer these types of products to their clients.
For those that are not, working out what they need to do to become authorised or establish a referral or introducer agreement should be a priority as the year progresses.
Tapping into the later life lending market opens up increased business
VICTORIA CLARK is head of lending at e Right Mortgage & Protection Network
potential, which can provide an additional source of revenue for advisers.
Given the growing blurring of boundaries between the mainstream and later life lending sectors, it is also best practice in a Consumer Duty world where holistic advice and consumer outcomes are paramount. Having at least one adviser within the business who is able to advise across all later life lending options, including lifetime mortgages, RIO and mainstream mortgages for older borrowers will ensure the needs of this demographic are met. It will also help to satisfy regulatory requirements.
For some adviser firms and sole traders, this may mean seeking help from a network like ourselves.
A network which prides itself on training, supporting and accrediting in being a specialist in the later life lending market.
Also, being part of a wider network enables advisers to refer the client if they prefer, leaving them free to focus on other aspects of their business.
As the UK population gets older and people continue to work and live for longer than ever before, demand for later life lending products is set to increase.
As such, 2025 and beyond promises to be a big year for the sector.
For advisers working in the later life lending space, or those just starting to grow into the sector, being part of a network that can provide the support, resources and access to products – while having access to some of the market’s leading whole of market commission rates – is the key to making the most of the opportunities available. ●
2025 has the potential to be a great year for the later life lending sector
Interest-only still has a place in today’s market
The Financial Conduct Authority (FCA) recently announced that it’s looking at ways to simplify some of the rules around responsible lending.
As a result, there has been a lot of discussion around the current responsible lending rules, with the debate over interest-only mortgages being reignited once again. I’ve seen articles questioning if interestonly mortgages might make a comeback, and if it’s time to make a concerted effort to revive them. In truth, interest-only has never really disappeared in certain areas of the market, and is still part of the market today.
The interest-only mortgages we see today, though, are a far cry from those we saw before the Global Financial Crisis.
In 2007, interest-only mortgages accounted for a third of all mortgage sales, and of these, around 75% had no reported repayment strategy, according to the FCA.
A er the financial crisis, we saw the regulator – and lenders – quite rightly tighten their stance on a number of areas, interest-only mortgages being one of them.
However, for older borrowers, when the circumstances are right, and with proper guidance including taxation implications, consideration of vulnerability and a full affordability assessment, interest-only mortgages can be a suitable option.
For example, a couple in their 70s may wish to remortgage to raise capital to help their child with a gi ed deposit for their first home.
Perhaps they’re retired or semiretired, living in a large home with substantial equity, and planning to
downsize in a few years. While they may not want – or be able – to commit to the monthly payments of a full capital repayment mortgage, they may comfortably be able to cover the interest-only payments using their income, pension, or savings.
In this case, they might decide to remortgage on an interest-only basis, gi the deposit, and downsize at their own pace in the near future – paying off the capital in full at that time. Until then, an interest-only mortgage would help keep their monthly payments down.
Of course, for any loans where the full capital element isn’t included in the monthly payment – including part interest-only and part-capital – there has to be a solid plan in place to repay the capital at the end of the term.
As a responsible lender, we need to see proof of that repayment strategy, so all the necessary documents must be provided before we can even consider a mortgage offer.
A changed market
The example above is a scenario where we believe interest-only mortgages can be used responsibly.
If house prices continue to rise as predicted over the next five years, we may see even more first-time buyers (FTBs) turning to their parents for help.
Recent figures from the Mortgage Advice Bureau show that one in seven people are either currently relying on or planning to rely on gi ed deposits from family to purchase a home. With parents helping their children onto the property ladder through gi ed deposits, interest-only mortgages could play a larger role in the market, especially for older borrowers.
The latest data from UK Finance shows that, at the end of 2023, there
ROB OLIVER is director of distribution at Dudley Building Society
were just 664,000 pure interest-only mortgages still outstanding, marking a 5.4% decrease from 2022.
On top of that, there were 200,000 partial interest-only mortgages – those combining capital and interest – that number was also 9.9% down compared to the previous year.
Looking at the bigger picture, the overall interest-only mortgage book has shrunk in size each year since the end of the financial crisis.
The total number of interest-only mortgages, including part-and-part, have fallen by 73% in number and 56% in value since 2012, when the data was first tracked.
It will be interesting to see if interest-only mortgages are revisited as part of the FCA’s potential easing of rules, and whether this is an area where we could see increased appetite from both lenders and brokers in the future.
Interest-only mortgages understandably carry the risk of being associated with some of their past irresponsible uses. However, as shown in the example above, an interest-only mortgage can be used responsibly when there is evidence of a reliable repayment strategy in place.
For older clients, it’s important that brokers don’t dismiss interestonly mortgages as an option, or as an alternative to equity release or a retirement interest-only (RIO) mortgage. Brokers should remain open-minded about how interest-only mortgages can be used to help older clients raise capital. ●
Defaqto ratings: Beyond the stars
At Paymentshield, we’ve worked with Defaqto for 15 years. Our relationship was born out of a desire to help advisers give their clients the peace of mind they deserve when protecting their home.
Now that we’re a month into Defaqto’s new rating year, which began on 1st February, it’s a good time to explore more about what these ratings actually mean, and how advisers can use them to support their client conversations.
The background
Defaqto’s Star Ratings aim to show customers where a product sits in the market based on the level of features and benefits of the policy. They are recognised as an indication of quality across financial products.
What’s key is that Defaqto rates products and not providers. Importantly, providers do not pay for their products to be rated, which ensures a review of the entire market, with advisers and their clients able to go to the Defaqto website for a fair and unbiased evaluation of available products.
The rating process itself is extremely thorough. Defaqto analyses more than 95 features across 255 buildings insurance products and 165 features across 283 contents insurance products. Defaqto then selects the most important features to include within the Star Rating Criteria. For 2025, there are 35 Criteria for buildings insurance and 62 Criteria for contents insurance.
Where Defaqto goes even further is through its DNA scoring system, where individual product features receive scores from one to five based on customer benefit. The system doesn’t simply reward the highest numbers, it puts weight behind policies which provide genuine impact to customers in response to their needs.
It’s crucial for advisers to be aware of this. Defaqto uses its knowledge of the market, informed by data from customer surveys, input from providers and also rulings by the Financial Conduct Authority (FCA) and Financial Ombudsman, to ensure that its ratings are dependable.
Its ‘Core Criteria’ rating concept means that policies have minimum standards that must be met before a certain rating can be given. For example, Paymentshield’s five-star rated home insurance policy has had to meet 16 buildings insurance and 28 contents insurance Core Criteria benchmarks before it’s been given the top rating.
Importantly, the ratings themselves are not static. While Star Rating Criteria are reviewed annually, the rating that each individual product achieves is not fixed for that 12-month period, meaning that any material changes to the policy can lead to an increase or decrease in the Star Rating at any point during the year.
Understanding the nuance
While a conversation about Defaqto ratings can help advisers demonstrate that all insurance is not created equal, where advisers can add real value to their customers is by appreciating the diversity within ratings.
Looking at five-star rated contents insurance, the coverage for outbuildings can vary from £2,000 to the full contents sum insured, but all fall within the five-star category.
Therefore, even though a client can go to the Defaqto website to compare star ratings themselves, an adviser can provide much richer information about the benefits of individual products. Indeed, by understanding that two five-star rated insurance products indicate comprehensive coverage but not identical benefits, advisers can be er match specific products to client needs, and help give additional peace of mind.
EMMA GREEN is distribution director at Paymentshield
By understanding that two ve-star rated insurance products indicate comprehensive coverage but not identical bene ts, advisers can better match speci c products to client needs”
Tools like Defaqto Compare, embedded on the Paymentshield website, can help advisers to understand where a particular provider’s policy might have particular strengths. This can be used to show clients how those features and benefits differ from the features and benefits of other policies available. At Paymentshield, we’re passionate about working with partners in the industry who deliver powerful insights and technology for advisers. Understanding the intricacies of Defaqto Star Ratings – and how they best fit differing needs – is critical to delivering valuable advice, and can make all the difference in forging lasting relationships with your clients. ●
Springing forward should make us think about home
STEPH DUNKLEY is development director at Safe&Secure
As the UK prepares to move the clocks forward by one hour for British Summer Time on Sunday 30th March, it marks the start of longer evenings and brighter days, but it can also subtly impact home security and insurance risks.
Burglary rates tend to drop as daylight hours increase, as criminals o en take advantage of the cover of darkness in winter, and so lighter evenings can act as a natural deterrent. However, the shi to spring doesn’t eliminate home insurance risk entirely.
With people spending more time outdoors, in their gardens, or even away for Easter holidays, opportunistic thieves may still strike. Unlocked garden sheds, open windows, and homes le una ended for longer periods can all create greater risk for your clients’ home and belongings.
If they leave a window open and a break-in occurs, their insurer may deny the claim on grounds of negligence. Many policies cover outbuildings, but only up to a certain amount. Valuable garden equipment or bikes may require additional cover.
Tip: Some insurers may insist on details of speci c locks or alarm systems, and failing to comply could invalidate the coverage.
The arrival of spring o en means sprucing up gardens, bringing out patio furniture, and investing in plants or outdoor lighting. But these new additions can become easy targets for thieves.
Not all home insurance policies automatically cover garden items. Clients should check their policy to see if it includes the or damage to outdoor property.
Longer days mean more DIY projects – and more potential accidents. Full accidental damage cover could save them from paying out of pocket.
Tip: Make sure your clients know how much a policy covers plants and garden items, especially if they plan to invest in expensive outdoor furniture or tools.
The clock change inevitably gets us excited about barbecues and having guests around. As people fire up barbecues, use fire pits, or clean chimneys for the last time before summer, fire risks can increase. Some insurers require working smoke alarms for full coverage. Failing to maintain them could cause issues during a fire-related claim.
Tip: Use the clock change as a reminder to test smoke and carbon monoxide alarms and schedule any necessary inspections.
The clock change coincides with school breaks and the lead-up to summer, when people start taking weekend trips or longer holidays.
Many insurance policies specify that if your home is le empty for more than 30 or 60 days, cover could be reduced or invalidated. Even shorter absences might affect a policy if the policyholder hasn’t followed security
requirements – like locking windows or activating alarms.
Finally, we all love a spring clean. The tradition of spring cleaning is a perfect opportunity for your client to do a mini ‘audit’ of their belongings and ensure their home insurance accurately reflects your possessions.
Many homeowners accumulate new valuables over the winter –gadgets, appliances, or home gym equipment – without updating their insurance policies.
If a client does underestimate the value of their possessions, the insurer might not pay out the full amount in the event of a claim. Jewellery, bikes, or garden equipment may exceed single-item limits on a policy, meaning they’re only partially covered.
Tip: While cleaning, create a home inventory. Take photos of valuable items, keep receipts, and use this as a reference when updating insurance coverage.
Here’s a quick checklist to help your client align their home insurance with the clock change:
Test smoke and security alarms. Check security features like locks, alarms, and cameras.
Update the home inventory and personal possessions, including the garden.
Inspect outdoor areas for hazards. Check the home insurance policy for unoccupied maximum periods. Notify the insurer of recent renovations or new high valuables. ●
In Profile.
Q&A
The Intermediary speaks with Katherine Carnegie, chief commercial officer at LV=, about investing in the right people and processes to create change in the market
From growing up “dreaming of being an accountant,” to becoming CCO with more than 12 years under her belt at LV=, Katherine Carnegie has “always loved numbers, puzzles and problem solving.” A year on from her appointment as CCO, The Intermediary sat down with Carnegie to discuss her experience running the firm’s wealth, protection and later life business, rising through the ranks in a male dominated industry, and plans for the future.
Evolving over the years
During her time at LV=, seismic changes have shaped the business and the industry.
Carnegie explains: “Technology has changed almost every aspect of life just in the time I’ve been here. It has changed how we interact with businesses, what we are enabled to do, and what we expect from companies.
“Digitalisation has been instrumental in enhancing our ability to provide an excellent experience for both our members and advisers, with a focus on providing outstanding customer service. That means really being there at those key moments for customers.”
Carnegie explains: “That’s a key milestone, providing advisers with the tools they need to build a stable and resilient investment strategy in an ever-evolving regulatory environment.”
This proposition has room to grow, she adds, considering the unexpected turns of the past few years, and it has already started rising in popularity, not least with regulatory reviews of retirement advice focusing on advisers taking a look at their “end-to-end client services.”
Recent challenges
This also ties in with the core mutual model, and the values entrenched when LV= was established in 1843. In the past decade, the firm has introduced customer and adviser portals to provide online routes to the business.
Carnegie says: “Our core purpose is to help people to live financially confident lives. Over the past 12 months while I’ve been CCO, I’m really proud of how we’ve served those customers when they really need us.”
She points to LV’s diverse proposition, from protection to smoothed investments and equity release, all of which has continued to progress and develop. One of the biggest milestones has been the launch of the LV= Platform Services proposition, a retirement-focused platform that advisers can use to help clients access the firm’s Smoothed Managed Funds, designed to manage volatility within their portfolios while maintaining returns.
For a business that prides itself on helping with financial resilience, the past few years have been quite the proving ground.
Carnegie says: “One of the key challenges of recent times is the cost-ofliving crisis. We’ve seen the impact both on customers and advisers.”
LV= has navigated this by ensuring flexibility, such as implementing payment breaks within the protection space, allowing customers to flex rather than cancel a policy.
Despite concerns that squeezed finances might see people risk being under-insured, flexibility and forbearance – alongside a Coviddriven realisation of the value of protection –has seen a more positive trend than expected.
“People are recognising the importance of financial confidence and resilience in their lives,” Carnegie says.
She adds: “We’ve also continued to innovate in order to help customers when they need it the most. Another example is the launch of our range of LV= Lifestyle products, offering additional choice for customers considering equity release.
“They might be looking to equity release in order to help themselves, or perhaps to help a loved one get onto the housing ladder, for example. The additional features within that range are designed to provide greater flexibility.”
This, and the move to more holistic advice, means that equity release is likely to naturally be considered as part of the “wider financial health picture.” This includes investments, pensions, equity release, and fixed term annuities.
KATHERINE CARNEGIE
Carnegie asks: “If you’re looking at a client’s endto-end wealth during retirement, why wouldn’t you be looking at their housing wealth as you go into that conversation?”
Despite positive trends, the ‘protection gap’ persists. Carnegie highlights the role of protection as part of financial resilience, and that more must be done to raise awareness of where it can help.
LV’s recent ‘Reaching Resilience’ study found that, while working people are more optimistic about their financial resilience compared with 2022, more than four in 10 households would only be able to survive for up to three months without an income. Meanwhile, 48% of workers lack any form of protection cover, such as income protection or critical illness.
Carnegie says: “LV= has a key role to play in providing the products and services that can get the right outcomes for members.”
This continues in the retirement space, where more than half, according to LV’s ‘Wealth and Wellbeing’ research, do not think they would have enough income in retirement.
“There is a real education piece needed,” Carnegie says. “Advisers already work hard to do that, and we just need to keep pushing those key messages across the industry.”
At the core
Looking back over her first year in a new role, Carnegie is also proud of her work as a leader.
“It’s really important to me that the colleagues around me are values-driven,” she says. “They are really passionate to succeed for our members. That’s really important to LV= as a mutual as well.”
Speaking in the lead up to International Women’s Day on 8th March 2025, Carnegie also points to the work done throughout her career to ensure she, and other female employees, had opportunities to succeed and play to their strengths. With more to be done across financial services, Carnegie highlights key elements that contribute to success.
“I have been very lucky to have a number of really supportive mentors,” she explains. “These are individuals that have provided coaching, advice and in some instances, they’ve provided those opportunities to succeed. That person that has faith in you, and who makes sure you recognise those opportunities, is extremely important.”
To strengthen both the business and the sector, Carnegie voices the importance of “nurturing talent from all different backgrounds” and helping those individuals recognise their own talents.
This includes employee-led networks across the organisation, such as LV= Balance, which focuses on supporting staff through the key milestones, with a focus on gender diversity – such as
menopause, parental support, improving women’s financial resilience, and investing in their careers.
Carnegie also speaks to the importance of initiatives such as ‘reverse mentoring’, whereby younger employees help senior leaders gain fresh perspectives and tackle barriers they might not realise are in place.
While Carnegie is clear about the need to keep evolving to meet modern needs, this is based on the foundations of LV’s original purpose and values. These values tie in not only to delivering its members a diverse and inclusive service and set of products, but ensuring a strong internal culture.
Carnegie says: “We deliver our member-first philosophy by delivering the right outcomes and returns for our members. We also achieve that by attracting the right talent within the organisation.
“At the heart of that is an inclusive, value-led culture. It’s one of the reasons I’ve been here for 12 years. This means being inclusive in the products and services we offer, but also creating an inclusive environment where people want to come to work.”
Looking to the rest of the industry, Carnegie says: “A lot has been done over the years, but there’s always more that can be done to promote diversity, equality and inclusion. Leaders and businesses all have a role to play, whether as advocates or providing opportunities to progress.”
The year ahead
The optimistic hope for 2025 is that market turbulence will settle, rates reduce and stability return, while investments continue to perform. Even if all of this happens, the need for flexibility and product innovation will remain.
Carnegie says: “Customers and advisers will have ever-changing needs, be it from a digital perspective, or their needs in a changing financial market. Our proposition set means we are wellplaced for that, but innovation and investment will always be key.”
Carnegie is looking forward to building on the solid foundations of LV’s core proposition, and progressing as a “thriving mutual delivering fantastic outcomes and returns for its members.”
LV= has managed to return over £385m back to members since 2011, and its aim is to continue investing in technology and infrastructure. Most important, Carnegie says, is to invest in the right people, future-proofing the business.
Carnegie concludes: “Having been here for 12 years, I’ve never been as excited to be part of it as I am now, and to be able to help lead the business through these exciting times.
“Our members have given us a clear mandate – they believe in our mutuality, and the best we can do is create a good legacy, both for today’s members and those in the future.” ●
Case Clinic
Want
CASE ONE
First-time landlord with adverse credit
Aclient earning £55,000 wants to purchase their first buy-to-let (BTL) for £220,000 with a 25% deposit. They have the required deposit and a strong rental income projection. However, they have a history of missed payments on a personal loan and a satisfied County Court Judgement (CCJ) of £3,000 from two years ago.
TOGETHER
Our BTL offering allows up to three demerits in the previous 12 months for applicants on our flexi product, and one in 36 months on our specialist product. Together is also happy to accept first-time buyers and first-time landlords.
We can lend up to 75% loan-to-value (LTV) on standard property types, meaning this applicant could access lending assuming affordability and valuations were as expected.
UNITED TRUST BANK
UTB would consider this despite the missed payments. This would be subject to a decision in principle (DIP) and affordability, and providing the CCJ was over two years old – satisfied or unsatisfied – and the personal loan account was up to date and no longer in arrears. The applicant would already have to own a residential property.
QUANTUM MORTGAGES
We accept up to £2,500 of satisfied CCJs within a 24-month period; however, satisfied CCJs over 24 months ago can be disregarded. We could
proceed immediately, because by the time the loan completed, the CCJ would be over 24 months old.
HARPENDEN BS
We can consider first-time landlords, with a minimum income requirement of £30,000 met jointly between all applicants. Unfortunately, we need to be three years clear of any settled defaults or CCJs in excess of £500.
CASE TWO
Mortgage for conversion
Acouple seeks to convert two properties into a single home, priced at £400,000 and £300,000, with a 10% deposit for each. However, this involves extensive structural changes, and a Grade II listed building – special planning permissions and strict regulations. The projected conversion costs are £250,000. The couple plans to finance the conversion costs through personal savings and a mortgage.
TOGETHER
Together can consider providing a mortgage while works are being carried out, subject to a review of the schedule. As the property is for personal use, this would be our standard regulated mortgage –so monthly payments would be due and the funds would be released in one stage.
This would be subject to a surveyor’s opinion of the end value, which may be lower than the combined value, while also understanding the
level of works due to the one property being a listed building.
BUCKINGHAMSHIRE BS
There would be two potential options. It could be considered under a self-build renovation option, or if the applicants were able to raise the funds via an alternative source, maybe bridging.
The society could look to do a day one remortgage once the renovation is completed and signed off with building control.
WEST ONE LOANS
As one of the properties is listed, we would need to see the approved planning permission. Obtaining this can be a long process and can add more expenses.
We would also need to know if the borrowers are living in the residence during the work. If the property is vacant, we would not be able to approve a mortgage, but if they were to take out a bridging loan with us, they could potentially exit onto a residential mortgage.
We would also be able to look at consolidating any renovation debt and working that into the mortgage application.
HARPENDEN BUILDING SOCIETY
Our self-build products offer a great solution. We can consider lending up to 75% of the current land value (combined) plus build costs, enabling us to access higher loan amounts where development is taking place.
CASE THREE
Expanding portfolio with complex income
Aclient earning £65,000 as a director of their own company wants to purchase a £350,000 BTL property. While their company is profitable, they take a low base salary and rely heavily on dividends, which fluctuate each year, making affordability calculations difficult.
SANTANDER FOR INTERMEDIARIES
Santander uses a simple measure to assess income on BTL properties. Customers must have £25,000
earned income, which their mortgage adviser should retain proof of on file. For self-employed customers, one year’s trading figures is sufficient.
We have simplified our affordability calculator to focus on the keys to BTL affordability: rent, property value, tax band. Cases are assessed on an interest-only basis, which can be a win for those choosing capital and interest. The adviser should view the calculator outputs as an accurate guide.
BUCKINGHAMSHIRE BS
If it is a limited company where the applicants are 100% shareholders, the society can consider using net profit plus director renumeration. We would need to see a good track record of the company’s performance, ideally three years. Company accounts would need to be provided. Evidence on the SA302 showing the dividends would also be required as an average could be considered due to the fluctuation.
TOGETHER
We have a flexible outlook on projected income, so while we would review the income from the previous two years via tax returns, we could also use an accountant’s projection for the coming year. This can be reviewed from day one of the new tax year. If the borrower decided to hold back some dividend payments for tax reasons, and if this could be shown to be increased for the coming year, including any projected increase in profits, it could be used towards affordability. Together could also look to utilise total secured debt to income ratios to prop up any shortfall.
UNITED TRUST BANK
UTB would consider this due to our no minimum income BTL criteria. The applicant should be able to evidence earnings through their limited company, usually by way of their SA302s. As we do not use earnings to support the application affordability – it must pass on just the rental income alone – the fluctuating income is not a consideration when underwriting.
QUANTUM MORTGAGES
We do not require a minimum income and simply need to be satisfied that the applicant has an income to support their lifestyle.
HARPENDEN BS
As long as the business profits appear sustainable, we can utilise either salary and dividends, or salary plus share of net profit after tax, to meet the £30,000 minimum income. ●
Iwill not be taking part in this year’s festivities on 8th March. Usually, I am giving a speech somewhere – unpaid, because a er all it is women’s work – and watching lots of virtue signalling while reading about what the numbers actually tell us about those companies crowing about their success.
On Saturday 8th March, I shall instead be landing in Rwanda. Plans include shopping at a women’s cooperative that is doing a great deal to support women in business, meeting and encouraging women building their own careers to provide for and
improve the lives of their families and their country. Somehow, it all feels much more real.
So why am I, an incorrigible optimist, feeling curmudgeonly about International Women’s Day (IWD)?
Well, I’m fed up pointing out that, as 51% of the adult population, women are neither a minority nor very diverse – except from each other. What we are, instead, is much more aligned with younger generations and all other diversities. Whatever benefits women, benefits the majority of those people deemed ‘different’ from the ones who have held the power and the finances for generations.
My first ever big speech was for the Glasgow Herald bicentenary. We, the panel, argued for 50% representation in business and politics.
This isn’t exactly a groundbreaking statement, I hear you say, plenty of women call for it every day. But that speech took place in 1983! I have the newspaper cu ing, or I wouldn’t believe it myself.
Here I am still talking about it – boring you, boring me. We have moved at glacial speed in employing the entire talent pool more effectively and treating women with equity.
Research shows incontrovertibly that having a diverse workforce is good
for business, yet real results are slow to change.
I co-wrote the book ‘Coaching Women to Lead’, following research with the London School of Economics (LSE) in 2011, then the second edition in 2020. In the intervening time, some things had changed. This was mainly the number of people with ‘diversity’ in their job titles, the number of policies wri en, and yes, the number of women on boards –albeit non-execs, or the same women on a range of boards. But had things really changed in the real world? And if not, why not?
Call me a psychologist, but I see some of the answers to the puzzle in the deep-seated erroneous beliefs people hold, handed down by ancestors and never fact-checked. Political correctness means that the bulk of those who hold these beliefs have the sense not to say them out loud, but this concern for appearance backfires, as their silence means that the beliefs are never aired – and therefore challenged – in the light of day. Here are some of the common ones:
Myth #1: Women do not ‘need’ their jobs in the same way that men do
As evidenced by the chap who foolishly said to a very senior woman who decided to leave the organisation – for more money and less stress –“But your husband is well paid. You must just work for the pin money.” Should she have stayed at home doing her embroidery?
Women are breadwinners, contributing equally or more to the household in many situations. They are also single parents and divorcées, just like men. But they are o en the first to be let go in downturns, or held back from advancement, because deep down, it is assumed they don’t need the money as much as the men
Myth #2: Women don’t bring in as much money as men
One law firm was keen to “do the right thing,” as they put it, and have more women as equity partners. “We know they don’t bring in as much money,
but it is still the right thing to do,” they said. Our response was to crunch the actual numbers.
In fact, as it turned out, the few women who had made it to that level were star contributors. They had to be, to prove themselves and get to where they were. There was a long tail of low-performing male equity partners, but the belief was perpetuated, despite all the evidence to the contrary
Myth #3: Women won’t stick around
The truth is that, despite the narrative that babies will lure women away from the workplace, this is not the whole picture. In fact, men don’t stick around because they change jobs more frequently, expecting more from their employers and demanding what they believe they are worth.
Women, meanwhile, tend to be more foolishly loyal, hoping that their employer will treat them right if they continue to prove themselves –give them raises commensurate with their results, and opportunities for advancement based on how well they do the job – and not because they shout louder than their peers.
If a woman does eventually leave, she will go where she believes she can make a bigger impact and get the opportunities she craves. Interestingly, while men say they work to support their families, women say they work to make a difference. She may take some time out for family reasons, but the likelihood is that she will come back even be er placed and more commi ed than before.
Accelerate action
There are many more examples of faulty and inaccurate thinking. By all means, let me know your own favourites. For now, we come back to International Women’s Day. The slogan for 2025 is ‘Accelerate Action’, but how do we make that real? First, what action for change have you planned for the next year? How can you make it more impactful?
As we have barely gone from nought to 60 in 50 years, it would be good to think about how acceleration could now finally be achieved. Perhaps it needs women to do it for themselves, stop trying to be nice about it, and go big – or should we just wait another 50 years for things to change?
AVERIL
LEIMON is co-founder of White Water Group
As we have barely gone from nought to 60 in 50 years [...] think about how acceleration could now nally be achieved”
If you haven’t read about Iceland’s ‘kvennafrí’ – or ‘women’s day off ’ –of 1975, repeated at intervals since and achieving greater equality each time, check it out. In 2023, Prime Minister Katrin Jakobsdó ir joined the women walking out of work to protest the gender pay gap and genderbased violence.
So, celebrate the women in your firm – don’t worry men, you get 19th November for International Men’s Day, but it is up to you to make something of it. Make examples of stars and role models. Ask them what they really want, listen carefully and enlist their help in making it happen this year. Give them their seat at the next table, the stretch assignments, the development they crave, the feedback they cherish.
Make sure you define how you will ‘Accelerate Action’. Report your pledges openly and ask your employees to keep you accountable. Treat it like any other business challenge and lead from the top. Otherwise, IWD is just a ‘corporate Valentine’s Day’ with lots of show and sentiment.
I’d love to hear that you are doing something profoundly different this year. Me? I’ll be shopping. ●
The dangers of brokers using large language models
Artificial intelligence (AI) has made some serious inroads over the past year or two, thanks largely to large language models (LLMs) like ChatGPT.
Many brokers in the mortgage industry are harnessing the power of LLMs to streamline operations and enhance service delivery. AI can process data at speeds unmatchable by humans, drastically improving decision-making efficiency and accuracy. However, tools like ChatGPT have inherent risks a ached to them.
Use #1: Analysing nancial documents
One of the primary applications in brokerage is to quickly si through reams of financial data, ranging from bank statements to credit files.
AI models are trained to identify pa erns and key information that can help with assessing an individual’s financial health and suggested level of credit. This allows brokers to make informed decisions faster, enabling them to advise clients more effectively.
Use
#2: Automating client communication
LLMs are adept at generating various forms of communication, from emails to detailed client reports. Brokers use these models to dra personalised messages and detailed explanations of financial advice for their clients.
By automating these tasks, brokers can save time and reduce human error, ensuring that communications are both accurate and consistent.
Use #3: Enhancing client interactions
Beyond analysing data and automating communications, AI tools are also
used to enhance direct interactions with clients. AI chatbots, for example, can handle initial client inquiries, schedule appointments, and provide instant responses to basic queries. This helps manage client expectations and improves accessibility, allowing brokers to focus on complex and nuanced client needs.
Use #4: Risk assessment and management
AI models help brokers in identifying and managing risks. By analysing historical data and current market conditions, AI can predict potential risks and recommend precautionary measures. This proactive approach in risk management does a good job of protecting the client’s interests while also supporting brokers in maintaining compliance with regulatory standards.
Ethical implications
Despite these benefits, when brokers use AI tools like ChatGPT to analyse personal bank statements or credit files, they risk exposing sensitive information. The main issue lies in how data is processed and stored. AI models require access to large datasets to learn and make predictions. This data, when transmi ed to or processed by third-party AI providers, could be accessed by unauthorised parties. Beyond this, the nature of AI-generated outputs, such as communications detailing reasons for financial advice, might inadvertently reveal personal financial details that should remain confidential. This compromises client trust and may also violate General Data Protection Regulation (GDPR).
Under GDPR, data controllers are required to implement appropriate technical and organisational measures
IFTHIKAR MOHAMED is director at WIS Mortgages and Insurance Services
to ensure that data processing is performed in compliance. The use of AI by brokers must be heavily scrutinised under these guidelines.
Brokers must ensure that any AI tool they use complies with GDPR principles, such as data minimisation, where only the necessary amount of data should be processed, and integrity and confidentiality, ensuring that personal data is processed securely.
The ethical use of AI also comes into question. Should AI have access to personal financial information? How transparent are these processes to the clients? Brokers must address these questions to maintain ethical standards and client trust.
Specialist solutions
Specialised private platforms that cater exclusively to financial professionals can provide a solution. These typically have robust data protection measuresin place. By using these types of services, brokers can leverage the power of AI while adhering to legal and ethical standards.
These platforms can facilitate the secure processing of sensitive data and provide brokers with the peace of mind that compliance is maintained. They offer a controlled environment where AI’s capabilities can be harnessed without compromising client confidentiality or violating regulatory requirements.
While AI presents significant opportunities, the risks must be strongly considered.
To help with this, brokers should consider specialised private AI platforms, ensuring that they deliver superior service without compromising. ●
Why we should embrace AI in advice
The use of artificial intelligence (AI) in financial services is under the spotlight at the moment.
The Treasury Select Commi ee recently announced it would be conducting an inquiry into the subject, as well as whether it poses a risk to our economic stability.
Meg Hillier, the Labour MP who chairs the group, said that the probe would look into not just how financial firms can make the most of the technology, but also what risks need to be guarded against.
As she put it: “It’s critically important the City can capitalise on innovations in AI and continue to be a world leader in finance.
“We must, though, also be mindful of ensuring there are adequate safeguards in place to mitigate the associated risks, particularly for customers. This piece of work will allow us to see the full picture.”
That distills the challenge well, in my view. So, how can we harness this ever-present technology in a way that genuinely benefits our customers?
How can financial services firms –advisers and providers alike – leverage AI to enhance customer outcomes while mitigating potential risks to their financial wellbeing?
Delivering for advisers
It’s easy to talk about the potential that AI offers our industry, and financial services more generally, but it won’t happen without firms grasping the opportunity.
We need to be hands-on in understanding how AI can be integrated into the way we work on a daily basis, to not only clearly recognise the opportunities, but to also devise solutions to the hurdles
which will inevitably emerge. It’s a challenge we are proactively taking on at Rosemount. Last year, we recruited an AI specialist to oversee how we can leverage this technology to support our advisers. There are certain areas where we can see an immediate benefit, pu ing AI to work to streamline tasks for advisers, or to support them with the data they need when working with clients.
But we want to push beyond that, with the development of our own AI chatbot. We see the potential for the chatbot to act effectively as a digital assistant, bringing together not only real-time client data, but also outlining market trends, what may lie ahead, and providing suggestions for the client and adviser to consider.
When utilised properly, we believe this technology can not only help advisers to be more efficient, and get more from their time, but also make a genuine improvement to the standard of advice on offer.
Of course, it’s worth bearing in mind that while AI has been grabbing headlines, it’s only one example of how technology can deliver for advisers. On a daily basis, most advisers will rely on all sorts of portals and tools for sourcing products, calculating costs and submi ing applications.
There is much work for all of us to do in ensuring that the technology we use each day is providing our clients with a smoother, more satisfying experience. As an industry, we cannot afford to stand still.
Reaching potential
One of the biggest hurdles any adviser faces is a simple lack of time. They may have ambitions to expand into certain areas, or deliver a more comprehensive service, but don’t feel
AHMED BAWA is CEO of Rosemount Financial Solutions (IFA)
able to because they are so stretched. This is certainly true of sole trader firms. Given these time pressures, AI likely feels out of touch – the sort of technology they are unable to engage with properly to understand it fully. It’s something they can look at again in the future, at some undefined date and time when the workload isn’t quite so heavy. However, it’s a time that will never arrive.
I strongly believe that this is where networks can add real value to their members. A good network puts in the work to identify how their advisers can truly reach their potential, whether that’s pu ing on bespoke training, integrating and developing technology, or even something as simple as working with each adviser as an individual, rather than viewing them as a number on a balance sheet.
By handling the heavy li ing, networks enable advisers to focus on what they do best – servicing the needs of their clients.
Rather than spending days or weeks mastering AI applications, advisers can rely on their network to do the groundwork and deliver a refined solution.
AI has the potential to dramatically improve the way that advisers work, and the service they deliver. But if all advisers are to benefit, including the one-man-bands, then networks must take a leading role in establishing how the technology can be incorporated. ●
Data modelling and net zero
The fight to slow climate change and hit net zero by 2050 has been gathering steam for more than five years now, but real progress has been slower than many might want. Target deadlines were pushed back, and pushed back again, under previous Conservative Governments, struggling to keep favour with their core voters and knowing a General Election was looming.
With a new Labour Government now in office, many of those rollbacks have been, or are in the process of being reversed. In the residential property sector, there has been a flurry of activity over the past six months.
Big commitments
The Government has commi ed to upgrading five million homes by the end of this Parliament, and to reduce fuel poverty by ensuring as many fuel-poor homes in England as is reasonably practical achieve a minimum energy rating of Band C by the end of 2030, partly through its Warm Homes Plan.
A significant element of this is set to come from the private rented sector, where landlords will be required to ensure that their properties achieve at least an Energy Performance Certificate (EPC) rating of C by 2030.
This poses challenges and opportunities for landlords, but the implication for lenders is very real, adding another layer to the need to collect as much data on climaterelated risk and energy efficiency. Lenders are already on the hook to publicly disclose their exposure to climate-related risk under the Task Force on Climate-related Financial Disclosures regime.
This is further backed up by recent changes at the Bank of England. In its own disclosures published last summer, the bank outlined several steps to mitigate climate-related
financial risks to residential mortgage collateral posted in the Sterling Monetary Framework.
As part of these operations, the bank lends to eligible firms against collateral, including residential mortgages, which represent the majority of collateral posted with the bank.
In 2023, it started collecting EPC ratings for residential mortgage collateral on a mandatory basis, and in early summer 2024 said it would no longer accept buy-to-let (BTL) mortgages in England and Wales with an EPC rating of less than E as collateral unless the counterparty can confirm that there is a valid exemption in place. All of this requires data. More of it, be er quality and collected more frequently.
EPC-centric
Currently, regulation and policy rely on EPC ratings, and this will step up a gear with the higher Minimum Energy Efficiency Standards. Cue more change. In December, the Government opened a consultation proposing sweeping reform of the energy performance of buildings regulations. Plans include introducing more complex metrics for EPCs and stricter oversight of EPC quality, along with a review of how long they remain valid. Planned consumer research must be central to final decisionmaking, and we’re questioning why the Government measures validity of the EPC in terms of years – shouldn’t it be valid when put to use, whether that is to claim grant funding or meet minimum standards?
Also of interest is the need for short-term lets and heritage homes to get EPCs. New tech may not suit every home, but every home needs a plan as we face increased insecurity both in energy and climate.
This extension will close gaps in consumer awareness and the national dataset, and we will be working with
MARK BLACKWELL is COO of CoreLogic
Government to determine how to tailor advice for those older homes –not least because our Ecofurb service is a pioneer in tailoring advice and delivering sympathetic retrofits. Whatever the final rules are, it’s anticipated that changes to the EPC metrics will be introduced in the second half of 2026.
While all of this will inevitably accelerate the drive to decarbonise British homes, improve energy efficiency and bring down the cost of heating for all households, it isn’t going to provide lenders with the tools they need to manage their own risk exposure.
Even with improved EPC metrics, there is still considerable climaterelated risk that won’t be captured. And even with more regular EPC inspections, there will be properties on lender back books with inaccurate valuations because climate risk and energy efficiency standards are so out of date.
This risk presents a material difference to the value of residential mortgage assets – one that is increasing with every degree average temperatures rise and millimetre sea levels go up. The data is available, and it doesn’t rely wholly on EPCs.
Following our acquisition of Parity Projects last year, we are now working with several mortgage lenders to run analysis of addresslevel data to identify, assess and model properties that should be targeted for retrofit measures.
Policy and politics are about to go full steam ahead for net zero, but it can only go so far. We in the private sector also have a vital role to play. ●
Mortgage tech: Put customers rst –that means brokers
It is well known that buying a home is stressful. Saving for a he y deposit, working on your credit score, finding payslips or SA302s, bank statements, proof of expenses, bills, all your outstanding credit card balances, loans and car finance, finding a broker, a lender, crossing your fingers and biting your nails hoping you get a mortgage agreement in principle. Instructing a solicitor. Estate agents. All that before you even find the perfect house or apartment, co age in the country or pied-a-terre.
Our recent research found that half of all those who have applied for a mortgage say the feeling they most associate with the mortgage application process is anxiety. One in 10 would rather be stuck in a li for 12 hours straight than go through the process again. One in eight would rather listen to roadworks continuously for four hours. The stress for home buyers is clear. However, we talk a lot less about how stressful it can be for brokers – but we should.
Chasing all the above for the buyer, dealing with the demands, the tears, the endless questions, the paperwork, endless bits of paperwork ge ing stuck with the solicitor, chasing said solicitor, the mortgage valuation, answering underwriters’ questions, keying and rekeying and keying again to get applications over the line.
There is always something else –and o en the process can be fraught with short-tempers with o en li le thanks.
Brokers are frazzled
With the added weight of compliance, marketing, staff and running a business, the actual business of giving mortgage advice can feel like being
a therapist or mediator in the rocky road to marriage of borrower and lender. Show me a broker who doesn’t feel frazzled at least once a week. Meanwhile, lenders heavily rely on them to do all this heavy li ing. The Intermediary Mortgage Lenders Association (IMLA) estimates that the share of mortgage business conducted through intermediaries will continue its upwards trajectory, rising from 87% in 2024 to 89% in 2025 and 91% in 2026. Without intermediaries, the mortgage market would not run smoothly. They are a vital cog in the machine.
It seems poor to me that there is still so much mess and waiting around in the journey from application to approval. Depending on the borrower’s income source and financial situation, it can take anything from two to six weeks. Sometimes longer. The process of completing a purchase in the UK now takes an average of six months. That is half a year.
There are various reasons for this. Ask brokers, and they’ll tell you it’s the lawyers who always slow things down. Mortgage lenders have li le control over this – other than by holding their panel to account – but they do have control over their own systems and processes. They do have the power to make life a lot easier for advisers, to save them a lot of time, stress and needless admin.
Some lenders are be er than others, but not enough. Most lenders in the UK are still relying on legacy systems dating back decades, patched and patched and patched. No wonder the process is clunky.
This has a tangible impact on brokers, though. Take just one example: product refreshes. Lenders and intermediaries know rates and
JERRY MULLE is UK managing director at Ohpen
deals change all the time. They ebb and flow depending on prudential requirements, changing regulations, fluctuating interest rates, swap rates, the broader economic outlook.
Throughout the year, quarterly lending targets affect product pricing, typically starting a quarter competitive before rising slightly to stem lending flow and then coming down again at the end of the quarter to get the last of the allocated funding out of the door.
Product withdrawals and launches are a fact of life. How long do they take to do, though? That’s a choice made by the lender. It comes down to the technology platforms they use. Investing in a wholesale change from legacy platforms to a brand-new system is a big decision for lenders. There is a business case to be made to justify the cost; the decision will always involve alternative options. Adding another patch or a new app on the front end might seem easier, less risky, or even cheaper.
It’s a mistake to think that. A fully thought-through business case to invest in cloud-based tech should come down to more than cost. It should be about how cost-effective that investment is long-term.
Repricing products, using all the data lenders have si ing in their systems doing nothing, processing applications – all this can be done faster and more accurately than it is by most lenders.
Not only does cloud-based tech allow lenders to operate more efficiently and cost-effectively, it does the one thing that all businesses must do to survive. It puts the customer first. For lenders, that means brokers. ●
Using AI as a BDM – am I lazy?
In short, the answer to the titular question is yes. But let’s dig a li le deeper into that answer. The formalisation of banking began in Ancient Babylon, around 2000 BCE, with lending practices evolving ever since. Throughout the Middle Ages, financial systems developed further, eventually leading to the introduction of credit cards and ATMs in the 1950s and ’60s. Modern banking has continuously adapted to technological advancements, always striving to improve efficiency in how money is spent, lent, and borrowed.
Artificial intelligence (AI) is the latest innovation in this long history of financial evolution. Whether we like it or not, AI makes our lives easier and improves productivity. As the old saying goes, “Give a lazy person a difficult job, and they will find an easier way to do it.”
Business development
As a business development manager (BDM), I know that relationships are at the heart of my role. No AI tool (yet) can replace the human touch required to negotiate, understand,
and execute deals – especially in development finance, where every project comes with its own unique set of complexities.
Admi edly, I was – and to an extent, still am – sceptical about AI. I’m not particularly tech-savvy, and I keep my distance from my everdemanding iPhone whenever possible. However, my perspective has started to shi . It all began with a 51-page valuation report.
AI in action
A deal landed on my desk on a particularly hectic day – one of those where an influx of enquiries arrived, varying widely in quality, as any BDM will appreciate. One enquiry, however, stood out: a strong project that had already broken ground with another lender. It came with the added benefit of a valuation report and an interim monitoring report – both crucial to my initial appraisal.
Rather than painstakingly reading 51 pages of surveying jargon, I turned to AI. By uploading the report and asking for a summary, I instantly received the key points. Even be er, I could ask specific questions to extract
WILL CALITO is sales executive at Magnet Capital
AI didn’t make the decision for me, but it provided the clarity I needed to move e ciently”
the most relevant details, saving valuable time and effort.
More recently, I encountered another enquiry – this time with some tricky legal and title complexities. The clients were under pressure, as their original lender had pulled funding at the last moment, and they needed an urgent decision.
Before escalating the ma er to our legal team, I used ChatGPT to break down the issue, assess its severity, explore potential solutions, and identify any risks.
Once I was confident that, with some flexibility, we could proceed with funding, I took the case to our underwriting team for a quick yes or no. AI didn’t make the decision for me, but it provided the clarity I needed to move efficiently.
So, is using AI lazy?
‘Lazy’ is probably not the right word. As a BDM, I’ll take any opportunity to enhance the service I provide to brokers and clients.
AI allows me to work smarter, not harder. It helps cut through the noise, streamline processes, and ultimately make be er-informed decisions.
No, ChatGPT didn’t write this article – but it did check for spelling mistakes. ●
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
Focus on... Stoke-on-Trent
Nestled in the heart of the UK, Stoke-onTrent may not always grab the limelight in national property conversations, but it is emerging as a city of opportunity.
With its rich industrial heritage and a vibrant, evolving community, the city’s property market has become a beacon for savvy buyers and investors looking for growth potential at competitive prices.
As with most regions, Stoke is not immune to the pressures of rising interest rates, affordability concerns, and shifting buyer preferences.
Yet, it is the unique blend of affordable housing options, growing demand, and continued regeneration efforts that make this market one to watch.
The Intermediary sat down with property and mortgage professionals in the area to take a closer look at the trends shaping this dynamic market, exploring what is in store for Stoke, not only for the remainder of 2025, but also for years to come.
Property prices
Despite its steady appeal, Stoke-onTrent’s property market has not been immune to recent economic pressures.
The average property price in the area currently sits at £208,000, with a median price of £180,000 – offering a relatively affordable entry point compared to many other cities.
However, prices have increased slightly, with a £322 rise over the past 12 months, reflecting broader market adjustments.
Sales activity has slowed, with 7,400 transactions recorded, marking a 20.4% decline (-2,000 sales) compared to the previous year.
This drop in sales aligns with a market where buyers are treading carefully, assessing affordability in the face of rising mortgage costs.
Demand remains strongest in the £100,000 to £150,000 and £150,000 to £200,000 brackets, where more than 3,000 properties (42.9%) changed hands, reinforcing Stoke’s reputation as an accessible market for first-time buyers and budget-conscious movers.
Those looking for the most budgetfriendly options will find ST4 1 to be the most affordable postcode, with an average price of just £86,000, while at the other end of the spectrum, ST5 5 leads as the most expensive, boasting an average price of £428,000.
Detached homes command the highest values, averaging £340,000, while semi-detached properties sit at £195,000, terraced homes at £134,000, and flats at £105,000.
A buoyant market
Despite wider economic struggles, Stoke-on-Trent’s property market has shown consistent resilience, driven by affordability and a steady demand for housing.
JESSICA O’CONNOR is senior reporter at e Intermediary
“The market is very buoyant,” says Ian Cooke, CeMap mortgage and protection adviser at PK Finance, part of Just Mortgages.
“People will always need to move –whether it’s for a new job, a growing family, or a lifestyle change.
“Stoke-on-Trent is an affordable area, so it tends to stay steady.”
While the Stamp Duty rush has slowed, demand remains strong, and well-priced properties continue to sell quickly.
However, Cooke notes that “the only real obstacles come when sellers are a little too ambitious with their asking prices.”
The lending landscape has also remained active, despite broader economic concerns.
Cooke explains: “Residential lending has remained strong.
“Lenders are still keen to lend, particularly towards the end of the year when they want to build their pipeline for the next.”
David Lownds, head of products and marketing at Hanley Economic Building Society, shares a similarly optimistic outlook.
He notes that “Stoke is experiencing a high right now,” with the first-time buyer market particularly active.
However, even with the drop in the Bank of England base rate, Lownds observes that “most borrowers are still opting for fixed-rate mortgages due to wider economic uncertainties.”
James Adams, director at My Simple Mortgage, echoes the sentiment that the Stoke-on-Trent market remains strong, but acknowledges a slight shift in buyer behaviour.
“The housing market in Stoke-onTrent reflects a fairly similar picture to the rest of the UK,” he says.
“House prices are rising steadily, which gives confidence to homeowners.
“While the demand for new purchases is slower than we’ve seen, there is certainly demand and resilience within the Stoke market.”
With fluctuating interest rates, some buyers have taken a ‘wait and see’ approach, delaying applications in hopes of securing a better deal.
However, Adams says that “good advisers are encouraging customers to secure a rate now through an application, that can always be
lowered before completion if a better rate is available.”
Key demographics
Stoke’s borrower demographics reflect a market driven by both first-time buyers and existing homeowners seeking stability in uncertain times.
With an average age of 42.1 years among its 655,000 residents, the area sees a steady flow of transactions.
“There’s a lot of movement happening,” says Cooke. “Firsttime buyers are still keen to get on the ladder, and they play a crucial role – when they buy, the whole market moves.”
However, he notes a shift in their approach compared to preCovid trends.
“First-time buyers have become more realistic about what they can afford, which is a shift from the preCovid days when people stretched themselves too far trying to buy a mansion as their first place.”
Despite economic challenges, demand remains strong due to the ongoing housing shortage.
“Ultimately, people will always need homes and mortgages,” he adds.
Meanwhile, remortgaging activity is surging, a trend expected to continue into 2025.
Market optimism
PIAN COOKE
CeMap mortgage and protection adviser at PK Finance, part of Just Mortgages
eople will always need to move. Stoke-on-Trent is an affordable area, so it tends to stay steady. If a house is priced correctly, it will sell. We saw a big rush before the Stamp Duty deadline, but demand remains strong.
Residential lending has remained strong. Last year was busy, and despite expectations of a slowdown following the Budget, demand has held up. Lenders are still keen to lend, particularly towards the end of the year when they want to build their pipeline for the next. Rate reductions have also kept things moving.
There’s a lot of optimism in the market. First-time buyers have become more realistic about what they can afford, which is a shift from the pre-Covid days when people stretched themselves too far trying to buy the mansion as their first place.
Ultimately, people will always need homes and mortgages, and with a shortage of housing, demand remains high. Lenders are maintaining a strong appetite for lending, making mortgages more accessible, which keeps things moving.
Affordable areas
SDAVID LOWNDS head of products and marketing at Hanley Economic Building Society
toke is experiencing a high right now, with property prices rising by 17.2% last year, according to the Halifax Price Index. Despite this growth, it remains an affordable place to buy. We have experienced greater demand from first-time buyers, with applications up 15% year-on-year. December 2024 was our best December on record for applications, which we believe was influenced by the Stamp Duty window.
Despite the drop in the base rate, most borrowers are still opting for fixed-rate mortgages due to wider economic uncertainties.
First-time buyers (FTBs) make up 40% of our applications. On the other end of the spectrum, we’ve seen a 22% year-on-year increase in retirement interest-only (RIO) applications.
We host local broker events, such as breakfast clubs, to provide networking opportunities and support.
We haven’t seen a huge demand for buy-to-let locally. However, we also haven’t experienced a significant number of redemptions ahead of upcoming regulatory changes for landlords.
Adams notes: “Predominantly, we’ve been helping customers with remortgages on their residential mortgages, and we see no sign of this slowing down.”
He points out that many borrowers are coming off ultra-low 5-year fixed rates secured during lockdown, or the much higher rates from two years ago, creating “a bumper year for remortgages.”
However, the rising cost of living has also led to an increase in complex credit cases, with more borrowers struggling with short-term credit like credit cards.
Dominant trends
Borrowing trends in the region reflect a growing preference for long-term stability, with fixed-rate mortgages dominating the market.
“Over recent years, we’ve seen a significant shift from 2-year fixed rates to 5-year fixed rates as customers want security over their budgets for longer,” says Adams.
He notes that this trend “shows no real sign of going away,” as borrowers look to safeguard against potential interest rate fluctuations.
Even 10-year fixed rates are becoming more popular, particularly among risk-averse buyers who
prioritise predictability in their repayments.
Lender preferences in the area are increasingly diverse, with borrowers seeking products tailored to their unique financial situations.
Adams explains: “We are a wholeof-market broker, so we have a broad range of lenders we use.”
While no single lender dominates, he highlights a rising engagement with alternative and specialist lenders to accommodate an increasing variety of credit and income profiles.
Among the local players, Hanley Economic Building Society has carved out a strong presence, particularly among first-time buyers and later life borrowers.
“First-time buyers make up 40% of our applications,” says Lownds.
At the same time, he notes that the society has seen a 22% year-on-year increase in retirement interest-only (RIO) applications, reflecting an aging borrower demographic seeking flexible mortgage solutions.
In addition, Hanley’s commitment to the local market extends beyond mortgage offerings.
The building society also fosters professional connections through local broker events, such as breakfast clubs, creating networking opportunities
and strengthening ties within the Stoke-on-Trent property sector.
New-builds
As Stoke’s property landscape evolves, an abundance of new-build developments popping up in the region continue to play a key role in shaping the city’s future.
The average price of a newly built property now stands at £258,000, reflecting a -1% decrease over the past year.
However, sales activity has remained steady, with 210 new-build transactions recorded.
Most of these sales occurred in the £200,000 to £250,000 price range, indicating a strong demand for midmarket properties.
Cooke says: “Like many areas, there’s a push for more affordable housing.
“Angela Rayner has been vocal about the need for new homes, and we’re seeing a lot of development in Stokeon-Trent.”
The city’s expansion is bringing new jobs, increased housing demand, and a positive ripple effect on existing property values.
At the same time, an interesting trend is emerging.
“There are also pockets of highervalue properties emerging, which is an interesting trend to watch,” Cooke explains.
Infrastructure investment is also a driving force behind Stoke-on-Trent’s growth. Lownds highlights the city’s ambitious regeneration plans, beyond just new-builds.
He says: “Stoke is currently undergoing a major regeneration project, which includes significant housing developments.”
One of the most notable schemes is the multi-million-pound Etruscan Square regeneration project, where Genr8 Kajima Regeneration Limited has been named the preferred bidder.
“This highlights the city’s commitment to growth and investment,” Lownds notes.
Rental market
While investment in infrastructure is on the rise, spelling out positive trends for the future, the region’s buy-to-let market is facing a period of adjustment, with shifting investor sentiment and evolving regulatory landscapes shaping the sector.
Currently, private rentals make up 17.8% of the housing stock, falling significantly below the national average of 23.6% for England and Wales.
While demand for rental properties remains steady, the market is seeing a shift in investor behaviour.
Lownds notes that while buy-to-let has not seen a major boom in the area, there also “hasn’t been a significant number of redemptions ahead of upcoming regulatory changes for landlords.”
Meanwhile, broader economic challenges and tighter lending conditions are affecting the higherend rental market.
Cooke highlights that “the higher end of the market, particularly properties over £350,000, is seeing more challenges.”
With first-time buyers stepping back due to affordability concerns, “it’s usually investors who keep things ticking over.”
Nevertheless, recent Government policies have placed pressure on landlords, leading many smaller investors to exit the market.
Cooke explains: “Government intervention has pushed many accidental landlords and even smaller portfolio landlords to exit, leading to a surge in properties being sold.
“The big question is how the market will keep balancing itself out without these landlords.”
At the same time, those more hardy landlords who have chosen to remain in the market are adapting their strategies to remain viable.
Adams observes that “the buy-to-let market has slowed in our experience, as customers are seeing their profits squeezed due to much higher rates, which makes the yield much smaller.”
To counteract this, a number of investors are diversifying into semicommercial properties and houses in multiple occupation (HMOs), which can offer stronger returns
A cautious approach
WJAMES ADAMS director at My Simple Mortgage
ith the fluctuation in interest rates over the last few years, customers are certainly more wary before committing to new mortgages. Customers are more inclided to take a ‘wait and see’ approach, which has slowed applications to a degree, but good advisers are encouraging customers to secure a rate now through an application, that can always be lowered before completion if a better rate is available. This protects customers against rate rises in the short term, as once an application is submitted, their rate is protected from rate increases in the market.
Over recent years we’ve seen a significant shift from 2-year fixed rates to 5-year fixed rates as customer’s want security over their budgets for longer. This shows no real sign of going away, and longer term fixed rates are certainly more attractive to wary customers. 10-year fixed rates are becoming more popular too.
While we don’t have a single lender that would be prominent, we are certainly engaging more with alternative and specialist lenders to cope with the increasing variety of credit and income situations clients have. 2025 is predicted to be a bumper year for remortgages as customers come off either ultra-low 5-year fixed rates that they secured in lockdown, or off the much higher rates from two years ago.
The buy-to-let market has slowed in our experience. Customers are seeing their profits squeezed due to much higher rates which makes the yield much smaller.
There is an increase in people looking at semi-commercial and house in multiple occupation (HMO) properties as they look to diversify their portfolio from standard let single-unit houses.
Stoke-on-Trent postcode area.
Source: www.plumplot.co.uk
in the current economic climate. This shift suggests that while the traditional buy-to-let market in Stokeon-Trent is cooling, investors are still finding innovative and creative ways to navigate and capitalise on opportunities within the rental sector.
Steady demand
It is clear that Stoke-on-Trent’s property market remains resilient and adaptable, driven by affordable housing, steady demand, and ongoing regeneration projects.
While challenges such as fluctuating interest rates and shifting investor dynamics pose questions about the future, buyers, homeowners, and landlords continue to find opportunities amid uncertainty.
The first-time buyer market remains particularly active, as remortgaging demand is expected to rise, and investors continue to explore alternative property types to maintain returns.
With lenders still keen to offer competitive deals and borrowing conditions remaining favourable, with the outlook for 2025 tentatively positive, this location is wellpositioned to weather economic shifts.
As Cooke aptly puts it: “Lenders are maintaining a strong appetite for lending, making mortgages more accessible, which keeps things moving.
“The key question is how long these conditions will last. For now, demand remains high, and the market is in a good place.” ●
On the move...
MT Finance promotes Raphael Benggio to director of bridging
MT Finance has promoted Raphael Benggio, previously head of lending in bridging finance, to director of bridging. Benggio said:
value to our clients and partners.”
Joshua Elash, founding director, said: “Raphael’s leadership has been instrumental in the growth and success of our bridging finance division.
Just Mortgages appoints divisional sales director
“The bridging market presents significant opportunities, and I am commi ed to working with our talented regulated and unregulated teams to continue to grow and improve our bridging offering to deliver even greater
W“This promotion is a testament to his outstanding contributions to the business, and it reflects our commitment to not only investing in our team but also enhanced service delivery for our clients.”
JWes McCranor launches protection advisory rm
es McCranor has launched Sphere Assured, a protection advisory firm that focuses on insurance solutions for small and medium sized entrprises (SMEs), mergers and acquisitions, professional athletes, media figures, and private clients.
The firm will operate as an appointed representative (AR) of Best Practice IFA Group Limited in partnership with WTT Group and Gerald Edelman. The firm provides services to both corporate and individual clients, including life insurance,
Rcritical illness insurance, income protection, and more.
McCranor said: “We created Sphere Assured to deliver a new standard of protection, by paying a ention to the detail that is o en overlooked by other businesses.
ust Mortgages has appointed Sandie Lear as divisional sales director for its metro region. Lear will lead her team of mortgage advisers across 21 Haart estate agency branches in East London.
She brings with her over 20 years of experience in the mortgage and financial services industries.
“By anonymously risk-profiling medical data before any policy decisions are made, we can mitigate the risk of clients being refused coverage due to flagged health issues.”
oss Turrell, commercial director at CHL Mortgages for Intermediaries, has retired following a 40-year career in financial services.
Turrell will be succeeded by Darrell Walker, director of sales and distribution at ModaMortgages. Walker will assume the role of group sales director for both CHL Mortgages and ModaMortgages.
Turrell first joined CHL Mortgages in 1998, starting as a business development manager and moving up to national field manager. A er roles at Fleet Mortgages and KSEYE
Lear previously worked at Woolwich, Countrywide, HSBC, and The New Homes Group, where she took on various roles related to system integrations, inductions, and training programmes.
McCranor added: “Sphere has big plans for 2025 and with the addition of new stakeholders and strategic partnerships, we are commi ed to delivering a unique and high-quality service to our clients.”
She said: “This opportunity is a great way to share my vast experience developing advisers to provide the highest level of service and advice, which ultimately brings positive outcomes across the board. It’s satisfying to watch the positive influence you can have on a team to help them be successful in doing what they love, which is where my passion shows.”
Ross Turrell retires from CHL Mortgages
Bridging, he returned to CHL Mortgages in October 2020.
Turrell said: “A er more than four decades working in financial services, now seems a good time to step back and hand over the reins to someone new.”
CHL Mortgages for Intermediaries into the well-thought-of lender it is today and I’m looking forward to helping it take the next step in its growth journey.”
Turrell added: “I’m passing on the baton into the very capable hands of Darrell and I’m sure he’ll do an excellent job helping drive CHL Mortgages for Intermediaries forward in the next stage of its journey.”
Walker said: “Ross and his team
Walker said: “Ross and his team have done a fantastic job building
SANDIE LEAR
RAPHAEL BENGGIO
ROSS TURRELL
FRANK PENNAL
WES MCCRANOR
ZARA BRAY
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