This week’s top headlines: FCA and PRA consider relaxing high-LTI lending rules and UK Finance’s Roe to step down as director of mortgages.
Explore these and other major industry updates below:
FCA and PRA consider relaxing high-LTI lending rules
The FCA and PRA are proposing to relax high loan-to-income (LTI) mortgage rules.
Lenders would no longer need permission to exceed 4.5x income lending above 15% of their book, as long as the overall market stays below the 15% cap.
They’ll still need strong risk controls, and regulators can step in if limits are breached.
UK Finance’s Roe to step down as director of mortgages
Charles Roe, director of mortgages at UK Finance, will step down on 31 March to pursue non-executive roles after leading the organisation’s mortgage work since the Covid-19 pandemic.
He oversaw responses to issues such as cladding, payment holidays, the Homes for Ukraine scheme and cost of living pressures, with Karina Hutchins taking interim responsibility supported by Ronnell Reffell.
Quilter hires Henderson as growth director
Quilter Financial Planning has appointed Gordon Henderson as growth director to support expansion of its mortgage and protection network, bringing over 30 years’ experience from Mortgage Advice Bureau.
Henderson will focus on recruiting high-quality firms and supporting existing partners’ growth while reporting to Zara Bray, as the firm continues to invest in and strengthen this strategically important part of its business.
Nationwide, Keystone, Accord and Leeds announce rate and product updates
Nationwide Building Society is increasing selected fixed and tracker mortgage rates by up to 0.25%, including across key buyer and remortgage ranges.
Keystone Property Finance has relaunched fixed-rate products after withdrawing them due to rising swap rates.
Accord Mortgages and Leeds Building Society have also announced rate rises and product changes, reflecting continued volatility and upward pressure in the mortgage market.
Buyer demand drops 13% as Iran war shakes confidence: Zoopla
Buyer demand has fallen notably, with enquiries down 13% year-on-year in March according to Zoopla, as rising mortgage rates and economic uncertainty dampen confidence.
Although house price growth remains steady at 1.3% and sales are being supported by committed buyers, others adopt a more cautious approach, leaving the market stable for now but increasingly sensitive to further increases in borrowing costs.
NatWest is raising mortgage rates for the second time in under a week, increasing many new business deals by up to 28 basis points alongside rises to tracker and other products.
This reflects ongoing pressure from high and volatile funding costs driven by inflation and energy prices, with brokers noting that lenders across the market are likely to continue repricing as conditions remain uncertain.
BTL fixed rates soar as Middle East conflict continues: Moneyfacts
Buy-to-let mortgage rates are rising sharply, with data from Moneyfacts showing two- and five-year fixed rates at multi-year highs due to geopolitical unrest, increasing borrowing costs and reducing product choice.
Landlords also face mounting regulatory pressures such as the upcoming Renters’ Rights Act and stricter EPC requirements, raising concerns that higher costs could push some to exit the market and further limit rental supply.
NatWest relaxes LTI requirements for many customers
NatWest Intermediaries has updated its loan-to-income criteria to allow some borrowers—particularly higher earners and interest-only applicants—to access larger loans through more flexible income multiples and additional income bands.
The changes are targeted and will benefit some groups more than others, applying only to new applications from 31 March.
Two-year fixes soar 101bps since outbreak of war to 5.84%
Average mortgage rates have risen sharply, with Moneyfacts reporting the typical two-year fixed rate climbing to 5.84%, up over one percentage point since the outbreak of war.
This significantly increasing borrowing costs and potentially dampening demand, particularly among first-time buyers, as lenders such as NatWest, TSB and Skipton Building Society continue to push rates higher.
Chancellor meets major banks and confirms mortgage support
Rachel Reeves has met with major UK lenders and UK Finance to coordinate support for mortgage borrowers facing higher costs.
Lenders have committed to proactively contact around 1.6 million customers whose fixed-rate deals are ending and to offer early guidance and options under the Mortgage Charter.
Higher rates driven by global conflict are increasing repayment pressures, with many borrowers facing a significant “payment shock” when moving off cheaper fixed-rate deals.
