This week’s top headlines include Monzo Bank being fined £21 million for lax anti-financial crime controls, and lenders signing an open letter warning the Chancellor not to slash the cash ISA limit.

Explore these and other major industry updates below:

Monzo fined £21m for poor financial crime controls by FCA

Monzo Bank has been fined £21 million by the Financial Conduct Authority for failing to maintain adequate anti-financial crime controls, allowing tens of thousands of high-risk customers to open accounts between 2018 and 2022.

Despite rapid growth in its customer base, Monzo’s systems failed to keep pace, leading to breaches of regulations designed to prevent financial crime.

The bank has since overhauled its controls through a comprehensive improvement programme, and while it faced a larger fine, it received a discount for cooperating with the investigation. Monzo’s leadership insists these issues are now firmly in the past.

Large lenders able to top key LTI 15% limit, says regulator

The Bank of England’s Financial Policy Committee has eased restrictions on large lenders, allowing them to exceed the previous 15% loan-to-income cap on mortgages over 4.5 times a borrower’s income, while keeping the overall market within this limit.

The change, aimed at supporting first-time buyers and economic growth, will give lenders like Nationwide greater flexibility to offer high LTI loans, particularly through schemes such as Helping Hand. While welcomed by lenders and industry bodies, concerns remain that without increased housebuilding, the move could push up house prices and repossessions. The new rules take effect from 11 July.

Lenders warn chancellor not to slash cash ISA limit

Leading figures from building societies, credit unions and the savings industry have urged the chancellor to keep the £20,000 cash ISA allowance unchanged, amid speculation it could be cut in favour of boosting investment in stocks and shares ISAs.

They argue cash ISAs are a vital savings tool for millions on lower incomes, with average balances providing crucial financial security, and that these funds support mortgage lending by building societies and credit unions. Reducing the allowance, they warn, risks raising mortgage costs, harming first-time buyers and undermining the government’s housing targets.

HSBC cuts rates on over 300 loans by up to 16bps

HSBC has reduced over 300 residential mortgage rates for both new and existing customers, with cuts of up to 16 basis points across products for home movers, first-time buyers, remortgagers, and international clients

Its lowest offer is a two-year fixed-rate at 60% loan-to-value, starting from 3.82% for Premier customers and 3.85% for others. The move follows similar reductions from Santander and NatWest, reflecting growing competition among lenders to attract borrowers with more competitive home loan deals.

Halifax details selected rate changes

Halifax has announced rate cuts of up to 0.10% on selected fixed-rate mortgages for home movers and first-time buyers, and up to 0.15% on certain remortgage products, effective from 9 July. No changes have been made to product transfer or further advance deals.

Brokers have until 8pm on 8 July to submit full applications to secure existing rates, with updates to be reflected across Halifax’s online intermediary platforms.

Fixed rate reductions continue as sub-4% deals back on the market

This week saw a wave of fixed mortgage rate reductions, with some lenders reintroducing sub-4% deals. Moneyfacts data shows average two-, three- and five-year fixes fell slightly, with three-year rates dipping below 5%.

Major lenders including Barclays, Halifax, HSBC, Lloyds, NatWest, and Santander cut rates by up to 0.18%, while several building societies and specialist lenders also reduced rates. Despite talk of a potential ‘rate war’, overall average falls remain modest.

Experts advise borrowers to assess the full mortgage package carefully and seek broker advice, as further cuts could follow if swap rates and base rates fall.

Property flipping hits lowest figure for 12 years: Hamptons

In early 2025, property flipping fell to its lowest level in over a decade, with flipped homes making up just 2.3% of transactions in England and Wales, according to Hamptons. Slower house price growth and rising costs have squeezed profits, with the average gross profit at £22,000—down from a 2022 peak.

Investors are increasingly active in the Midlands and North, where lower property prices and stamp duty make flipping more viable. The North East remains the country’s flipping hotspot, while higher taxes and costs have made refurbishing homes in the South less attractive for investors.

Cheshire brokerage in staff buy out

Employees at Cheshire-based Wiseone mortgage brokers have completed a buyout of the firm’s co-founders, Tim Rigden and Paul Newbold, transferring ownership to an employee ownership trust.

Founded 25 years ago, Wiseone will remain a directly-authorised firm and part of TMA Club, having recently won New Build Broker of the Year 2025.

Newbold is retiring this month, while Rigden will continue to lead the business with a new team of directors. Rigden said the new structure empowers staff and supports collective success, with TMA Club praising the founders’ customer- and employee-focused values.

Over half of brokers fear AI could take their jobs: Survey

Over half of mortgage brokers worry that AI could reduce the need for intermediaries, with 54.5% expressing concern in a Smart Money People survey. Despite this, over 40% have no plans to use AI tools, and only one in eight currently incorporate AI in their advice, mostly for administrative tasks rather than client support.

Brokers are divided on AI’s role in lending decisions, with just 6% very comfortable with it, while nearly 40% feel uneasy. Meanwhile, 34% of homebuyers use AI to explore mortgage options, appreciating its ease of comparison and clarity. Experts suggest a future where AI complements rather than replaces human advice, emphasising the importance of regulated, expert guidance.

Mortgage applications jump 42% in June: Stonebridge

Mortgage applications soared by nearly 42% in June compared to last year, according to Stonebridge network’s latest update. Falling mortgage rates—down 62 basis points over the year—have saved borrowers an average of £888 annually.

In June, 64% of borrowers chose fixed deals of three years or less, up from 60% last year, signalling hopes for future rate cuts, while 95% opted for fixed over variable rates.

Stonebridge CEO Rob Clifford expects at least one Bank of England rate cut this year, which could boost affordability and further increase market activity, indicating a growing buyer confidence and a potential housing market recovery.