The Intermediary – June 2025 - Flipbook - Page 14
RESIDENTIAL
Opinion
Rebuilding credit
shouldn’t take
sacrifice
I
n today’s marketplace,
straightforward mortgage
cases are increasingly rare.
Buyers and brokers alike are
navigating a tougher economic
climate, with affordability
a major concern, lending criteria
remaining narrow for those outside
prime profiles, and the rising cost of
living continuing to apply pressure.
The pressures on UK consumers
are both well-documented and
intensifying. According to The
Money Charity’s April 2025 statistics,
households are seeing steep increases
across essential bills:
The Energy Price Cap rose by £111 in
April, bringing average energy bills
to £1,849.
Water bills in England and Wales
surged by 26%, with the highest
average reaching £703.
Council Tax increased by 5% to
9.99% depending on the region,
further straining monthly budgets.
Additional hikes in broadband,
phone, transport fares, and
other utilities have compounded
this pressure.
Further data from the Insolvency
Service illustrates the growing
financial fragility:
In April 2025, 10,012 individuals
entered insolvency in England and
Wales. This was 8% higher than in
March 2025 and 4% higher than in
April 2024.
The individual insolvencies
consisted of 589 bankruptcies, 3,837
debt relief orders (DROs) and 5,586
individual voluntary arrangements
(IVAs). DRO numbers in April 2025
remained similar to the record high
levels seen over the past 12 months.
The number of IVAs registered in
April 2025 was similar to the average
monthly number seen in 2024.
14
The Intermediary | June 2025
CLAIRE ASKHAM
is head of mortgage sales
at Buckinghamshire
Building Society
Bankruptcy remained at about half
of pre-2020 levels, 11% lower than in
April 2024.
In the 12 months ending 30 April
2025, one in 417 adults in England
and Wales entered insolvency, at
a rate of 24.0 per 10,000 adults.
This is higher than the rate of 21.6
per 10,000 adults (one in 463) who
entered insolvency in the 12 months
ending 30 April 2024.
There were 7,273 Breathing Space
registrations in April 2025. This is
5% lower than in April 2024.
Adding to these challenges, inflation
jumped to 3.5% in April, from 2.6%
in March, driven by household cost
increases and employer cost passthroughs linked to recent National
Insurance and minimum wage hikes.
Core inflation climbed to 3.8%,
highlighting a sustained squeeze on
disposable incomes.
While two interest rate cuts had
been expected this year, April’s
inflation reading has cast doubt, with
some economists now predicting only
one cut, adding further uncertainty to
mortgage affordability.
Restoring control
For me, these numbers tell a clear
story. More households are struggling
to stay afloat, and for many, a single
missed payment or unexpected cost
can trigger wider financial distress.
Traditional lending models oen
don’t cater to those with impaired
credit profiles, even when past
issues were caused by temporary or
uncontrollable events.
Recognising this, a growing number
of lenders are stepping up with
innovative solutions that not only
offer access to credit, but also support
financial recovery. One such solution
is our Credit Restore mortgage,
Traditional lending
models often don’t cater
to those with impaired
credit profiles, even
when past issues were
caused by temporary or
uncontrollable events”
tailored for clients with historical
credit challenges. We’ve recently
increased the maximum loan-to-value
(LTV) on this product from 70% to
75% to offer even greater flexibility
and opportunity. This, alongside other
specialist products in the market,
provides much-needed breathing
space, and a much-needed pathway to
financial stability.
As an industry, it remains vital to
deliver responsible options which
allow borrowers to repair their
credit profiles over time, without
being unnecessarily excluded from
homeownership or viable refinancing
opportunities. For brokers, these
options allow them to expand their
advisory toolkit, enabling them to
service the needs of clients who might
otherwise be le behind.
Rebuilding credit shouldn’t be an
uphill bale fought alone. With the
right products, advice, and support,
more people can move from financial
recovery to long-term resilience, and
take meaningful steps toward securing
their future in the homes they need
and deserve. ●
