Chancellor Rachel Reeves has said she wants to lift limits on mortgages, simplify responsible lending and advice rules for mortgages to support more into homeownership and open a discussion on the balance between access to lending and the level of defaults.
There have been a raft of regulatory changes coming into effect, with the Financial Conduct Authority (FCA) issuing updated guidance on stress testing earlier this year, proposing changes to the loan-to-income (LTI) cap and opening a review of mortgage rules.
A poll by Landbay revealed that 16% of brokers said the reforms would be a boost to first-time buyers and 7% thought the reforms would kick-start growth.
Around a third of brokers thought the reforms proposed would lead to riskier loans and nearly half said the Chancellor was only tinkering with mortgage rules and it would not lead to big changes.
Rob Stanton, sales and distribution director at Landbay, said: “The Chancellor says she plans to tear up ‘reams of financial red tape’ and be ‘ruthless in slashing rules that make the UK uncompetitive’. But brokers aren’t quite so sure that looser mortgage lending rules will deliver that. While Rachel Reeves’ ambition is clear, our research shows brokers are cautious.
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“Only a quarter of the brokers we polled support rolling back post-crisis regulations, with nearly half dismissing the changes as mere tinkering. At Landbay, we understand the need for growth, but striking the right balance between access to lending and managing risk is critical to avoid repeating past mistakes.”
Stanton added: “Our survey shows that brokers are sceptical about the reforms to mortgage lending rules, with just 7% believing they’ll spark meaningful economic growth. This research reveals a clear concern among intermediaries, with 30% warning the reforms will lead to riskier lending.
“At Landbay, we’re committed to supporting a stable and sustainable buy-to-let market, but these changes need careful consideration to ensure they don’t compromise long-term financial stability. Rather than relying on the cutting of red tape, we’re exploring opportunities to ensure our range is competitive, while harnessing innovation through product transfers to increase routes for landlords set to refinance.
“Regardless of the regulation versus growth agenda, Landbay is pushing ahead to improve our range, equip brokers, and support borrowers.”
