blog mortgage118

Tag: lending criteria

  • UK Mortgage Market Sees Drop in Bridging Completions

    UK Mortgage Market Sees Drop in Bridging Completions

    The UK mortgage market has experienced a notable slowdown in the first quarter of 2026, with significant declines in bridging completions and applications. This trend is indicative of a cautious lending environment, influenced by broader economic factors that have dampened confidence across the property sector.

    TL;DR: Bridging completions fell 28% to £1.8 billion, while applications dropped 15% to £9.9 billion in Q1 2026; this trend reflects a cautious approach by lenders amid economic uncertainty.

    What are the latest figures for bridging finance?

    According to the Bridging & Development Lenders Association (BDLA), bridging completions in the UK fell by 28% in the first quarter of 2026, amounting to £1.8 billion. Additionally, applications for bridging finance saw a 15% decline, totaling £9.9 billion. This downturn is significant, suggesting a shift in market dynamics and lender confidence.

    How has development lending been affected?

    Development lending also took a hit, dropping 34% from £420.3 million in the previous quarter to £276.5 million in Q1 2026. This decline highlights a reduction in new development projects and reflects the cautious stance of lenders amid economic pressures.

    What does this mean for borrowers and investors?

    For landlords and investors, the decrease in bridging completions and applications may signal a tightening of lending criteria. With lender loan books standing at £11.5 billion at the end of March, the average loan-to-value (LTV) ratios have also decreased, from 58.64% in Q4 2025 to 56.64% in Q1 2026. This cautious approach could make it more challenging for borrowers to secure financing, particularly for higher-risk projects.

    What should brokers watch for in the mortgage market?

    Brokers should be aware of the shifting market in the mortgage market, as lenders appear to be taking a more conservative approach to risk. With the broader economic climate influencing property and mortgage activity, brokers may need to adjust their strategies to accommodate the changing needs of clients seeking bridging finance.

    Frequently asked questions

    What factors are contributing to the decline in bridging finance?

    The decline in bridging finance can be attributed to a combination of economic uncertainty and a cautious approach from lenders, which has affected confidence and activity in the property sector.

    How can borrowers navigate the current mortgage market?

    Borrowers should stay informed about current mortgage rates and consider exploring various options, including current mortgage rates and tailored advice from brokers to find suitable financing solutions.

  • Key Mortgage Market Updates: June 2026 Insights

    Key Mortgage Market Updates: June 2026 Insights

    The UK mortgage market is undergoing significant changes, with new proposals aimed at broadening access for various borrower groups and adjustments in lending criteria by major banks. These developments are important for first-time buyers, landlords, and investors as they navigate a challenging housing market.

    TL;DR: The FCA has proposed changes to mortgage rules to enhance access for first-time buyers and older borrowers; Hodge Bank has increased maximum loan sizes and relaxed affordability criteria, impacting potential borrowers and lenders alike.

    What are the FCA’s proposed changes to mortgage access?

    The Financial Conduct Authority (FCA) has outlined plans to amend mortgage regulations to facilitate easier access for first-time buyers, older borrowers, and self-employed individuals. These changes aim to reflect modern working patterns and demographics while ensuring robust consumer protections remain in place. The FCA is inviting feedback on these proposals until 28 July 2026, indicating a proactive approach to adapting the mortgage market to current needs.

    How are lenders adjusting their mortgage products?

    Several lenders are making notable adjustments to their mortgage offerings. Hodge Bank has enhanced its residential and retirement mortgage ranges by increasing maximum loan sizes at higher loan-to-value (LTV) ratios. Specifically, the maximum loan at 95% LTV has risen from £600,000 to £750,000, while the 90% LTV limit has doubled to £2 million. Additionally, the 85% LTV cap has increased to £2.5 million. Hodge will also accept 100% of bonus income and disregard voluntary pension contributions in affordability assessments, potentially allowing more borrowers to access larger loans.

    Other lenders, including CHL Mortgages and HSBC, have also made rate adjustments. CHL Mortgages has launched limited-edition buy-to-let products starting from 2.70% and reduced rates across its short-term let range by 30 basis points. HSBC is set to introduce broad mortgage rate reductions, while YBS Commercial has cut selected five-year fixed rates by 0.15% for various property types.

    What impact do these changes have on the housing market?

    The recent changes in mortgage products and lending criteria are expected to have a significant impact on the housing market. According to the Bank of England, new mortgage commitments rose by 12% to £78 billion in Q1 2026, indicating a stronger lending environment. However, the actual value of mortgages advanced fell by over 12% to just under £70 billion, suggesting that while more agreements are being made, the total value is declining.

    Bellway has reported that higher mortgage rates and rising construction costs are affecting demand, with private reservations down 6.2% year-on-year. This trend highlights the challenges homebuyers face in a market where affordability remains a pressing issue. The ongoing discussions around stamp duty reform, as urged by a cross-party parliamentary committee, could further influence first-time buyers’ ability to enter the market.

    What this means for first-time buyers and landlords

    For first-time buyers, the FCA’s proposed changes could open doors to more accessible mortgage options, especially for those who may have struggled with traditional lending criteria. The increased loan limits and relaxed affordability assessments from lenders like Hodge Bank may also benefit those looking to secure larger loans, especially in competitive markets.

    Landlords will find the recent rate cuts and product launches from various lenders beneficial, particularly in the buy-to-let sector. As rental inflation continues to rise in cheaper areas, landlords may see opportunities for growth in these markets. However, they must remain cautious of the overall market conditions, including the impact of rising construction costs and changing demand dynamics.

    Frequently asked questions

    What are the new maximum loan limits set by Hodge Bank?

    Hodge Bank has increased its maximum loan at 95% LTV from £600,000 to £750,000, doubled the 90% LTV limit to £2 million, and raised the 85% LTV cap to £2.5 million.

    How have mortgage rates changed recently?

    Recent adjustments include NatWest cutting rates by up to 15 basis points across residential and buy-to-let products, with significant reductions for landlord deals. Other lenders, including Virgin Money and Nationwide, have also reduced rates on product transfers.