Accord Mortgages Calls for Policy Reform to Address Borrower Affordability Concerns
Summary:
Accord Mortgages has urged for increased policy reform, regulatory review, and support for lender innovation following research showing growing broker concern over mortgage affordability. The study found that 73% of mortgage advisors predict borrowers will face greater challenges in the next decade due to the high cost of living and rising house prices. Jeremy Duncombe, managing director of Accord Mortgages, emphasizes the need for creative solutions to support first-time buyers and address affordability pressures. Recent regulatory changes, such as clarified affordability rules and reviewed loan-to-income (LTI) limits, have provided some relief, but more action is needed to ensure a robust housing market.
What This Means for You:
- Explore innovative mortgage products: Consider lenders offering flexible options like the £5k Deposit Mortgage to reduce upfront costs.
- Stay informed about regulatory changes: Keep up with updates on affordability rules and LTI limits to understand how they might benefit your borrowing capacity.
- Work with a mortgage broker: Leverage their expertise to navigate affordability challenges and find tailored solutions.
- Plan for long-term affordability: Anticipate ongoing financial pressures and factor in inflation, wage growth, and property value trends when budgeting for a mortgage.
Original Post:
Accord Mortgages has called for more policy reform, regulatory review and support for lender innovation, after its new research reveals growing broker concern over borrowers’ mortgage affordability.
The latest research found that 73% of mortgage advisors surveyed believe that borrowers will face greater challenges over the next decade due to the high cost of living and rising house prices, despite recent regulatory improvements.
Accord Mortgages managing director Jeremy Duncombe says: “While recent developments around affordability rules and loan-to-income limits are encouraging, more needs to be done – and faster.”
“As an industry, we must think creatively to support first-time buyers in particular and ease pressure around deposits, the disparity between house price and income growth, and affordability.”
“This means keeping up the positive momentum with a continued review of regulation to give lenders more freedom to innovate, allowing them to create new types of products – our own recent £5k Deposit Mortgage being one example which allowed people to borrow up to £500,000 with a deposit of £5,000.”
“And, from the Government, we need incentives for downsizers and a revamped Help to Buy scheme, as well as the reintroduction of Stamp Duty relief for first-time buyers, to ensure a buoyant housing market with more opportunities for all types of borrowers.”
Earlier this year, regulators clarified affordability rules and began reviewing loan-to-income (LTI) limits, allowing lenders to responsibly increase the flexibility they can offer borrowers, providing them with a significant lift.
Accord was among those to act on these changes, updating its affordability model and increasing its LTI limits to be able to lend more.
Duncombe explains: “Progress is happening, but these findings confirm what we already know –there’s still much more to do. Borrowers, especially first-time buyers, face significant obstacles like inflation, stagnant wages, and rising property values.”
“At Accord, as one of the country’s largest intermediary-only lenders, we understand the vital role brokers play in helping borrowers to navigate these challenges, and their importance will only grow.”
“Brokers also need to help tackle the lack of awareness in the market of the positive changes that have been made to date and what they might mean for their clients on an individual level.”
Extra Information:
UK Government Affordability Rules – Learn about the latest updates to mortgage affordability regulations and their impact on borrowers.
Help to Buy Scheme Overview – Understand how the Help to Buy scheme works and its implications for first-time buyers.
People Also Ask About:
- What is a loan-to-income (LTI) limit? – It’s the maximum multiple of a borrower’s income that a lender can offer as a mortgage.
- How does Stamp Duty affect first-time buyers? – Stamp Duty is a tax on property purchases, and relief for first-time buyers can significantly reduce upfront costs.
- What are the challenges for first-time buyers in 2023? – Key challenges include high property prices, rising interest rates, and stagnant wage growth.
- How can mortgage brokers help with affordability? – Brokers can provide tailored advice, compare products, and help borrowers navigate complex regulations.
Expert Opinion:
Jeremy Duncombe’s call for accelerated policy reform highlights the urgent need for systemic changes in the mortgage industry. As inflation and property prices continue to rise, lenders and policymakers must collaborate to introduce innovative solutions that address affordability challenges, particularly for first-time buyers. The future of the housing market depends on balancing regulatory flexibility with robust support for borrowers.
Key Terms:
- Mortgage affordability challenges
- Loan-to-income (LTI) limits
- First-time buyer mortgage solutions
- £5k Deposit Mortgage
- Stamp Duty relief for first-time buyers
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