The Intermediary – June 2025 - Flipbook - Page 6
RESIDENTIAL
Opinion
A lending strategy
beyond base rate
predictions
A
s the industry
continues to
anticipate the Bank
of England’s next
move, much of the
conversation around
mortgage lending remains dominated
by one question: when will rates fall?
But while rate cuts will inevitably
make headlines, pinning hopes of
recovery on interest rate changes is
both risky and short-sighted.
The real opportunity lies in taking
action now. Lenders must build longterm resilience into their offerings,
while brokers must continue to help
clients make informed decisions
based on personal circumstances, not
economic forecasts.
The cost of hesitation
We’re seeing more would-be
borrowers holding off, waiting for
the ‘perfect’ rate, a sharper drop in
inflation or a more stable outlook. But
this delay comes at a cost.
House prices in many areas
continue to climb – the most recent
official figures from the Government
show that average UK house prices
increased by 6.4% in the 12 months to
March 2025, reaching £271,000.
When rates eventually fall, demand
is likely to spike, potentially driving
prices even higher. For brokers, the
message is clear: pausing on the
sidelines can cost clients more in the
long run. Timing the market may
feel safe, but it oen leads to missed
opportunities. Brokers play a key
role in helping buyers weigh up the
bigger picture.
This is also where lenders must
step up. Rather than waiting for rate
cuts to do the heavy liing, now is
the time to offer innovative solutions
that meet evolving borrower needs.
Intermediaries need options that
6
The Intermediary | June 2025
reflect realities their clients face today,
not assumptions about where the
market might be tomorrow.
For example, we recently reduced
our stress rates across both residential
and buy-to-let (BTL) applications,
with the lowest now at 6.25% and
5.70% respectively. Earlier this year,
there were further sweeping criteria
changes, the biggest of which sees
that the society now accepts 100% of
second income, and recognises child
maintenance payments.
We also engaged the market ahead
of the significant Stamp Duty changes
that took effect in April by introducing
a residential cashback product that
helped prospective homebuyers –
especially first-time buyers – get up
to £5,000 in cashback to soen the
immediate impact.
These changes are designed to
support borrowers who might
otherwise struggle to pass affordability
checks, particularly those with
complex income streams or nonstandard employment. It’s a clear
example of how lenders can take
meaningful steps today to widen
access and empower brokers, to beer
serve a diverse client base.
More than a rate
Today’s borrowers are more
financially aware and digitally
informed than ever, but that doesn’t
mean they’re confident. Many are
navigating complex situations, from
irregular income to rising rental costs,
and are unsure how to align their
personal circumstances with what
lenders expect.
That’s where brokers add
tremendous value, not just as
product matchmakers, but as longterm advisers. When clients are
overwhelmed by economic noise,
brokers are the ones who can reframe
GREG WENT
is chief lending officer (interim)
at Nottingham Building Society
the conversation around readiness,
affordability and lifestyle fit.
That is why a steady, informed
voice maers more than ever. Lenders
should be supporting intermediaries
with clear product criteria,
transparency around decision-making
and tools that help make those
conversations easier. It’s not just about
beer deals; it’s about beer guidance.
Don’t miss the window
One insight we’ve seen in today’s
market is that higher interest
environments oen present more
leverage for buyers. When demand
is cooler, clients may have room to
negotiate, secure seller incentives or
avoid bidding wars – all of which can
result in savings that far outweigh
small changes in the interest rate.
This won’t last forever. When base
rates do start to fall, competition
will intensify. Buyers who move
now – with the right financial plan
and the right advice – may find
themselves in a stronger position than
those who wait.
There’s no doubt that confidence has
been shaken in the past few years. But
brokers and lenders have the power
to rebuild it – not through guesswork
or hype but by offering pragmatic
support, long-term thinking and
real solutions.
Brokers who guide clients with
clarity, and the lenders that equip
them with flexible, responsible
products, will lead the market
forward. The best lending strategy
doesn’t wait for perfect conditions. It
takes action and supports customers
where they are, right now. ●
