Pushing boundaries in a year of change – Blewitt

The Office of Budget Responsibility’s (OBR’s) boss quickly lost his job over the painful early Budget leak, but the impact of the tax changes on the other two will take more time to work through.

The confirmed 2% tax increase on income derived from property will put further pressure on landlords already potentially wrestling with the nuance of the Renters’ Rights Act, although other policy speculation like National Insurance costs (NICs) for landlords on rental income, came to nought.

The rest of the year hasn’t been without its drama. The stamp duty cliff edge drove business and blood pressure levels up in Q1 and the ongoing borrower affordability battle resulted in government pressure to relax mortgage stress testing.

The loss of the advice trigger in July opened the door to more execution-only sales, with higher product transfer figures from UK Finance in Q3 confirming that few look beyond their own lender if advice isn’t signposted to them and the digital pathway is easy.

At the back end of 2024, UK Finance predicted a “year of moderate growth” for 2025, and with Q1 up, Q2 down and then a resurgence in Q3, this was a solid prediction.

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The latest figures from UK Finance show that house purchase lending for the first three-quarters of the year reached £128bn, 25% higher than the same period last year. Refinancing also picked up in Q3, with 557,000 remortgage and product transfer loans up 48% year-on-year, with the majority going to product transfers.

Affording the future

The affordability struggle will continue to define and shape the mortgage market, and to help address this, we introduced higher income multiples of up to six times income and offer lending to 95%.

Key to our success this year has been a commitment to each and every segment of the market. From first-time buyers to specialist lending in areas like self-build, foreign currency mortgages, limited company buy-to-let (BTL) and foreign nationals, it’s important to us to stay relevant as a mutual. The borrower resilience found in complex lending is where we have refocused our energies, as the vanilla lending pot continues to shrink.

We expect to reach £235m in gross lending, which marks a 57% rise on the year before and predict net lending of close to £100m, more than four times higher than the previous year.

Broker engagement played a major role in this. It proved how much brokers add when cases rely on experience, clear advice and close handling.

Looking ahead with intent

I think complex lending will continue to be a major market driver in 2026.

We expect more borrowers to fall outside standard criteria and more advisers to seek lenders who can take a closer view. First-time buyers will remain central to our plans. I also expect demand for limited company BTL to grow as landlords look for steadier routes when facing changes to tax and regulation.

Mortgage rates will continue to fall next year, but not by much, sitting between 3.5% to 4.5% for the foreseeable future, but first-time buyers will remain an active segment if lenders continue to innovate.

In early 2026, we will launch automated decisions in principle (DIPs) for straightforward cases and continue to listen closely to broker feedback and enhance our criteria to dovetail with the real client scenarios brokers face every day.

If 2025 taught us anything, it was the value of clarity.

When you know what you stand for, as a mutual, progress follows. Our focus is on lending that supports hardworking people and on backing brokers who want to find a fair answer for clients who are overlooked elsewhere.