This week’s top headlines include the Chancellor announcing reforms to add over 35,000 first-time buyer loans a year, and the departure of the former Financial Ombudsman Service chief executive due to a ‘collapse in confidence’.
Explore these and other major industry updates below:
Chancellor to announce reforms to add over 35,000 FTB loans a year
Chancellor Rachel Reeves is set to announce major reforms to homebuying regulation aimed at boosting first-time buyer access to mortgages, including raising loan-to-income limits and introducing the permanent “Freedom to Buy” mortgage guarantee scheme.
Nationwide will lower income thresholds for its high loan-to-income product, potentially enabling 10,000 extra loans annually. The government hopes the changes will result in 36,000 additional first-time buyer mortgages within a year. While industry figures see this as a positive step for lower earners in stable roles, critics argue the reforms won’t address regional price disparities or the fundamental issue of insufficient housing supply.
Departure of FoS chief due to ‘collapse in confidence’: MPs
The Treasury Committee has sharply criticised the leadership of the Financial Ombudsman Service (FOS) over the sudden departure of its chief executive Abby Thomas, citing a breakdown in trust due to major disagreements on strategy and operations.
The committee condemned FOS chair Baroness Manzoor for refusing to explain Thomas’s exit, calling her stance “disrespectful” and asserting that public body leaders must be accountable to Parliament. With Manzoor set to leave on 1 August, scrutiny of the FOS continues amid broader government efforts to reduce regulatory barriers and promote growth.
A review of the FOS’s remit and compensation rules is underway, as the agency faces increasing calls for reform.
Chancellor holds off cash ISA cut after outcry
Chancellor Rachel Reeves has paused plans to cut the annual cash ISA allowance to £20,000 following strong opposition from building societies, consumer groups, and lenders, who warned the move could harm mortgage funding and penalise savers.
Critics argued cash ISAs play a vital role in financial resilience and home deposit saving. Instead, Reeves will focus on encouraging investment in stocks and shares, particularly in UK firms, during her upcoming Mansion House speech.
Industry leaders welcomed the Treasury’s decision to consult further, calling it a measured and collaborative approach to reforming the savings and investment landscape.
PRA eases mid-sized banking rules to allow mortgage market ‘scale up’
The Prudential Regulation Authority has eased liquidity rules for mid-sized banks by raising the asset threshold for emergency funding requirements under MREL rules from £15–25bn to £25–40bn, enabling these lenders to scale up in the mortgage market more easily.
The move, part of a wider regulatory shift to support growth, will also include a review of how mid-tier banks calculate credit risk capital and will introduce a simpler framework for smaller banks.
Industry leaders have welcomed the changes, seeing them as a boost to competition, mortgage availability, and support for mutuals, aligning with the government’s broader pro-growth agenda.
Accord responds to LTI limit changes with enhanced FTB options
Accord Mortgages, part of Yorkshire Building Society, has swiftly responded to the easing of higher loan-to-income (LTI) lending rules by expanding its ‘Boost LTI’ mortgage product. From 16 July, eligible first-time buyers borrowing up to 95% loan-to-value can access loans of up to 5.5 times their income, with the minimum income threshold reduced from £75,000 to £50,000.
The lender is also lowering the threshold for five-times income lending. These changes follow new guidance from the Financial Policy Committee, giving lenders more flexibility to support borrowers responsibly. Accord’s move complements similar steps by Nationwide, aiming to improve mortgage access amid rising house prices.
Birmingham Bank hires Burchill as head of lending
Birmingham Bank has appointed Jackie Burchill as its new head of lending, bringing over 30 years of experience in the specialist mortgage sector, including senior roles at GE Money Home Lending and Bluestone Mortgages.
Known for implementing technology-driven origination platforms, Burchill will now oversee lending customer services, underwriting, and completions. She expressed enthusiasm about helping the bank scale from its early stages.
Chief of operations Lee Dawkins welcomed the appointment as a key step in the bank’s growth strategy amid rising business demand.
Halifax parent Lloyds sets aside extra £4bn for high LTI lending
Lloyds Banking Group will offer an additional £4bn in lending to high loan-to-income first-time buyers through its Lloyds Bank and Halifax brands, expanding its FTB Boost product.
Following recent regulatory reforms, the group will raise its loan-to-income cap from 4.5 to 5.5 times income, increasing borrowing potential by 22%. For example, a household earning £50,000 with a 10% deposit could now borrow up to £275,000, up from £224,500.
This move aligns with wider industry shifts, as major lenders respond to eased restrictions aimed at improving affordability and access for first-time buyers.
Barclays launches new 3.75% rate
Barclays has lowered mortgage rates across its purchase, remortgage, and EMC Reward ranges, with its standout offer being a 3.75% two-year fixed deal for premier customers at 60% loan-to-value (LTV).
Non-premier borrowers can access the same product at 3.76%. Other rate reductions include a five-year fixed at 60% LTV cut to 3.91% and the Great Escape remortgage deal at 60% LTV reduced to 4.03%.
The bank is clearly targeting borrowers with competitive sub-4% rates despite ongoing inflation concerns, a move welcomed by brokers as lenders continue to jostle for business in a shifting market.
Mortgage Advice Bureau hands Toms new role
Mortgage Advice Bureau has appointed Sam Toms as lender relationships account manager, a new role within the business.
After leading MAB’s Events team for a decade, Toms will now support lender partnerships, drive innovation, and help underserved consumers, reporting to strategic lender relationship director Rachel Geddes.
Toms expressed enthusiasm for the role, highlighting her commitment to enabling advisers to approve more customers.
UK inflation in surprise jump to 3.6%
UK inflation unexpectedly rose to 3.6% in June, sparking debate over whether the Bank of England might delay upcoming base rate cuts, though many expect reductions to resume in August amid weak economic growth.
While this inflation rise may slow recent mortgage rate falls, changes in regulations and lender flexibility offer hope to borrowers.
Experts highlight the ongoing balance between controlling inflation and supporting growth, emphasising that despite challenges, now remains a favourable time for first-time buyers to enter the property market.
