This week’s top stories: Nationwide calls for government review of 4.5 times LTI cap, and Lloyds hires Amazon Prime veteran to ‘re-imagine’ home loans.
Explore these developments and more below:
Barclays UK hires Patel to lead mortgage, savings and insurance business
Barclays UK has appointed Jatin Patel to lead its mortgages, savings, and insurance business. Patel brings over 20 years of experience, having held roles at TSB Bank, Lloyds, and most recently as chief commercial, digital, and marketing officer at Hastings Group.
He replaces Mark Arnold, who is retiring after two years at Barclays UK and seven years as CEO of Kensington Mortgages. Allison Buckley, previously operations director at Kensington, becomes CEO of Kensington and will report to Patel. Barclays UK CEO Vim Maru welcomed Patel, citing his strong track record in customer-focused initiatives.
Nationwide calls for Govt review of 4.5 times LTI cap
Nationwide has called for a review of the loan-to-income mortgage cap to help more first-time buyers. The current cap limits lending to no more than 15% of loans above 4.5 times income.
Nationwide argues this restricts responsible lending and points to its successful Helping Hand mortgage. However, regulators warn that loosening lending rules could increase mortgage repossessions. The Bank of England and the FCA have called for a debate on the risks and benefits of relaxing the cap.
HSBC launches sub-4% home loan
HSBC has launched a sub-4% residential mortgage with a 3.98% five-year fix at 60% LTV for first-time buyers and home movers, along with other fixed-rate cuts for new and existing customers. This follows Santander’s withdrawal of a similar offer last week due to rising market swap rates.
HSBC also reduced other residential and landlord mortgage rates, including 60% LTV two-year remortgages down to 4.19% and five-year remortgages to 4.05%. HSBC’s move shows that competitive mortgage rates remain available despite ongoing economic uncertainty.
Lloyds hires Amazon Prime veteran to ‘re-imagine’ home loans
Lloyds Banking Group has appointed Natasha Sayce-Zelem as director of digital and business platforms within its homes business. Sayce-Zelem, who previously led partner engineering for Prime Video at Amazon, will focus on digitizing mortgage processes to improve customer experience.
She brings 18 years of digital expertise from roles at Amazon, Sky, and the BBC. Sayce-Zelem will be based in Leeds and report to group mortgage director Andrew Asaam, who highlighted her leadership as key to enhancing customer experiences and standing out in the market.
FCA promises ‘bold strokes’ to cut red tape
The FCA is speeding up efforts to reduce red tape and simplify regulations. CEO Nikhil Rathi outlined proposals to support growth, including simplifying mortgage rules and removing outdated guidance.
The FCA aims for fewer large-scale changes in its next strategy and stresses a trusting relationship between regulators and firms. Rathi also noted no further mass redress events, like PPI, are anticipated.
Debate over pace of ‘gradual’ base rate cuts: MPC Dhingra
Bank of England policymakers are divided on whether base rate cuts should be gradual, with some interpreting it as one cut per quarter. Swati Dhingra, a long-time dove, disagrees, emphasizing that gradual doesn’t necessarily mean 25 basis points every three months.
Dhingra has voted for rate cuts since 2022, citing weak demand as the main cause of the UK’s economic struggles. This comes as inflation pressures rise, partly due to an increase in energy bills. Dhingra was reappointed to the Monetary Policy Committee for a second term, which will last until 2028.
NatWest offers 5.5 times LTI borrowing for mortgages
NatWest has increased its loan-to-income (LTI) limits for residential capital and interest mortgages, allowing borrowers to access up to 5.5x income multiples.
Single or joint borrowers earning over £40k and borrowing between 75% and 90% loan-to-value (LTV) can get up to 5x LTI, while those earning over £75k (sole income) or £100k (joint income) can access up to 5.5x LTI.
These increases are subject to affordability and credit checks. This change is part of NatWest’s ongoing efforts to improve access to borrowing. Other lenders, such as Marsden Building Society and TSB, have made similar adjustments recently.
Landlord yields hit 13-year high: Paragon
Paragon Bank reports that rental yields for landlords reached 6.93% in December 2024, the highest since March 2011. This marks an increase from 6.72% in Q3 2024 and a 30 basis point rise compared to 2023. The growth is attributed to stable house prices and rising rents due to high tenant demand and limited rental supply. The highest yields were seen in Wales (8.09%), the North West (7.84%), and the South West (7.75%), while Greater London had the lowest at 5.48%. Properties like houses in multiple occupations (8.40%) and freehold blocks (7.28%) delivered the best returns.
Lisa 25% withdrawal penalty ‘needs to change’: Martin Lewis
Martin Lewis has called for a change to the 25% withdrawal penalty on Lifetime ISAs (LISAs), calling it unfair, especially for those from less financially educated backgrounds.
Speaking before the Treasury Committee, he argued the penalty acts as a 6.25% exit fee and discourages savers from accessing their money. Lewis also suggested raising the £450,000 cap on house purchases to reflect rising property prices and highlighted the lack of understanding and availability of LISAs from mainstream financial providers.
Brokers expect just two more base rate cuts this year: Landbay
Mortgage brokers now expect only two more interest rate cuts in 2025, following higher-than-expected inflation data.
A survey by Landbay showed that 54% of brokers predicted two cuts, while 26% expected one. Only 14% thought three cuts were still possible. Some brokers were more pessimistic, with 4% forecasting no cuts at all, and 2% expecting a drop to 3.5%.
Landbay’s Rob Stanton noted that with inflation above the target and rising employment costs, the Bank of England may keep rates higher for longer.
