Mortgage Strategy’s Top 10 Stories of the Week
This week, we cover L&G’s appointment of a new partnerships director following Beardmore’s retirement, the FCA’s plans to enhance Consumer Duty reporting, and eight other essential industry updates you need to know.
L&G appoints Hyett partnerships director as Beardmore retires
Legal & General Retail announced that Natalie Hyett would succeed Claire Beardmore as partnerships director, effective from February 2025. Hyett, currently growth director, has been with L&G for five years, working in various roles across distribution, product, transformation, and fintech investments. Managing director Ali Crossley praised Beardmore’s leadership over the past four years, guiding the team through challenging times. Beardmore expressed confidence that the team would continue to strengthen partnerships, and hopes to stay connected after her retirement.
FCA outlines improvements for company Consumer Duty reports
The FCA outlined key improvements for firms’ Consumer Duty reports following a review of the first annual submissions from 180 firms. Five features of a good report include a focus on outcomes, high-quality data, analysis of different customer types, clear processes, and a positive company culture. Areas for improvement include better data quality, a comprehensive view across distribution chains, analysis of customer types, board-level challenge, and clearer action plans. The FCA emphasized the importance of detailed, evidence-based reports with clear outcomes for vulnerable customers.
Rayner defines planning overhaul ‘to get Britain building’
Angela Rayner, Deputy Prime Minister and Housing Secretary, outlined plans to overhaul UK planning decisions to address the housing crisis. Key measures include fast-tracking applications that align with local development plans, streamlining planning committees, and introducing mandatory training for committee members. The government hopes these changes will provide greater certainty and efficiency, enabling the construction of 1.5 million homes over five years. While ambitious, the plan has faced industry skepticism due to challenges like high interest rates and consumer demand.
Halifax includes EPC ratings in maximum lending calculations
Halifax announced it would factor Energy Performance Certificate (EPC) ratings into its maximum lending calculations, adjusting loan sizes based on energy efficiency. Homes rated A or B will see higher borrowing limits, while F and G-rated homes will experience a reduction. EPC ratings from A to G affect disposable income by influencing energy bills. This change, effective from 10 December, aligns with government pressure on lenders to improve housing energy efficiency. It introduces a new approach to affordability, encouraging borrowers to enhance their properties.
Five-year fixes see biggest monthly rise since August 23: Moneyfacts
In November, average five-year fixed mortgage rates saw their largest monthly increase since August 2023, rising by 0.19% to 5.28%. This was due to volatile swap rates. The average two-year fixed rate also increased by 0.13%, reaching 5.52%. Over the year, five-year fixed rates remained 0.27% lower than in January 2024. Meanwhile, product availability grew, reaching 6,486 mortgage options. The average shelf-life of mortgage products increased to 21 days, indicating less aggressive re-pricing by lenders.
Govt plans set councils 370,000 homes a year target and five ‘golden rules’
The UK government set councils a target to build 370,000 homes annually as part of a planning overhaul outlined in the updated National Planning Policy Framework. This includes mandatory housing targets for councils, prioritising brownfield sites and reviewing greenbelt boundaries. New “golden rules” focus on affordable homes, infrastructure, and social rent. The government aims to build 1.5 million homes over five years, though experts stress the importance of clear strategies, including support for smaller developers and addressing workforce needs to meet ambitious targets.
Santander announces rate cuts on resi and BTL loans
Santander for Intermediaries reduced most of its residential and buy-to-let (BTL) fixed rates by up to 0.23%. For remortgages, it reintroduced 60% LTV green fixed rates with a £0 product fee. For new business, options were offered on 60% and 75% LTV two-year fixed rates, with £749 or £0 product fees. Santander added £250 cashback on 85% and 90% LTV purchase options and reduced selected fixed rates across various ranges. There were no changes to tracker rates.
House prices ‘unaffordable’ across all nations but Northern Ireland: ONS
The average home price in England reached £298,000 in the 12 months to March, equating to 8.6 years of household income, according to the Office for National Statistics. Since 1999, house prices have risen faster than incomes across all nations except Northern Ireland, where the ratio is 5 years. For low-income households, homes were “unaffordable” since 1999. In England, only the top 10% could afford an average-priced home, while Northern Ireland was the only nation where the average home was affordable to most.
Sesame Bankhall Group appoints new director to executive committee
Sesame Bankhall Group (SBG) appointed Claire Cherrington as DA distribution director, marking the fourth addition to its executive committee in 2024. Cherrington, with over 20 years at Lloyds Banking Group, will drive growth and increase market share for SBG’s DA businesses. She will report to CEO Richard Harrison and support mortgage, protection, and wealth firms under the Bankhall and PMS Mortgage Club brands. Cherrington’s appointment, set for March 2025, aligns with SBG’s ambition to become the UK’s leading provider of services to advisory firms.
House prices to rise 4% next year and rates to fall: Rightmove
Rightmove forecasted a 4% rise in average asking prices for 2025, predicting a buyer’s market with increased competition among sellers. It also projected four base rate cuts, lowering both two and five-year fixed rates to around 4% by year-end. The average five-year rate of 4.83% and two-year rate of 5.08% were expected to converge. With more homes available and the upcoming stamp duty changes, Rightmove anticipated 1.15 million transactions, though the year would see mixed market conditions due to varied mortgage rates.