Leeds Building Society have announced a broker update, available below. The Leeds Building Society products are available through our direct to lender mortgage club so contact us to see how we help brokers like you across the UK.
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Announcement:
Greater home ownership? It’s a flexibility thing
Getting on the property ladder isn’t easy – especially when it comes to affordability. But thanks to recent clarification from the Financial Conduct Authority (FCA) on stress testing, several lenders have updated how they assess affordability, opening new doors for borrowers.
So, what does this mean for brokers, lenders and the wider mortgage market?
Thinking flexibly
The FCA has provided guidance on how to incorporate future interest rate movements into stress testing and flexibility is at its heart. They emphasise that lenders can be more versatile when choosing a suitable stress rate. That means linking to reversion rates or future product rates, rather than applying a fixed margin above current SVR. Before, high loan to income limits were restricting many lenders’ ability to support aspiring homeowners and the UK growth agenda.
These changes benefit borrowers by potentially unlocking more lending, allowing them to step onto, or climb up, the property ladder. Reduced stress buffers also benefit those looking to remortgage. Clients coming to the end of fixed rates can now access a wider range of deals and switch lenders more easily without triggering income limits.
It’s also great news for brokers. It means intermediaries can say “yes” to more clients, and revisit affordability on cases where applications previously fell short.
Client engagement
This is a great opportunity for brokers to educate clients on what the changes could mean for them. Brokers can re-run affordability checks, and we’ve recently improved our affordability calculator to facilitate this.
Like all lenders, we’re mindful of balancing more generous affordability with responsible lending, encouraging growth while protecting our members. We welcome the clarification on lending rules which will allow us to help more people achieve their home ownership dreams and support the government’s plan for growth.