The Intermediary – October 2025 - Flipbook - Page 26
Q&A
Leeds Building Society
The Intermediary speaks with Martese Carton,
director of mortgage distribution at Leeds Building Society
Tell us more about your recent
analysis of Land Registry data, how
it has influenced your offering?
Our analysis shows that 51,602 more properties
would have been within reach of first-time
buyers, based on recent changes in lending
assessments. This is equivalent to an increase in
65% more homes.
We changed our affordability assessments for
first-time buyer mortgages, meaning that single
or joint applicant earning £30,000 could borrow
up to 95% loan-to-value (LTV). This means that
first-time buyers on this salary could borrow up
to £165,000, and therefore buy a home worth
£173,000. Before these changes, a first-time
buyer with a 5% deposit could have accessed
homes worth up to £141,000.
Using Land Registry data from 1st July 2024 and
31st June 2025, we calculated that the number
of homes that would have been affordable to
eligible first-time buyers had the lending rules
been in place rose to 143,017 up from 86,915, an
increase of 65%.
You’ve recently reduced stresstesting rates. How do you balance
expanding affordability with
prudent credit risk management?
Affordability assessments can be one of the
main barriers facing would-be homeowners, but
following recent clarification from the Financial
Conduct Authority (FCA), lenders have made
changes to the way they assess a borrower’s
affordability. Previous limits were restricting
many lenders’ ability to support aspiring
homeowners.
But the refreshed guidance from the FCA
clarified how to incorporate future interest rate
movements into stress testing. It emphasised
that banks and building societies have flexibility
in choosing a suitable stress rate, linking to
reversion rates or future product rates, rather
24
The Intermediary | October 2025
than applying a fixed margin above current
standard variable rates (SVRs).
Stress testing requirements have unduly
held some borrowers back from achieving their
aspirations, so we are pleased to be able to
lend more to our customers as a result of these
changes..Avoiding unnecessarily restrictive
affordability tests is also great news for brokers.
It means that intermediaries can say ‘yes’ to more
clients, and revisit affordability on cases where
applications previously fell short.
We will continue to update our stress rate
assumptions and affordability models to align
with regulatory expectations. In collaboration
with our intermediary partners, we’ll continue to
seek the best outcomes for borrowers as we have
done for 150 years.
Leeds reported a fourth record year,
what has driven that growth?
In an increasingly competitive environment, it
was wonderful to see the society deliver such a
strong performance in the first half of the year.
During that period, we helped 9,600 first-time
buyers secure a mortgage.
The recently reduced stress rate levels have
worked in tandem with a range of initiatives to
support first-time buyers and to increase our
lending ability. For example, our range of Income
Plus mortgages allow first-time buyers to borrow
5.5-times their income; our Reach mortgage
range is designed to help borrowers with lower
credit scores; our connection to Experian Boost
uses open banking to help borrowers increase
their credit score; and our Home Deposit Saver
account allows people to put money away to fund
a house move.
This innovation has enabled more people to
overcome affordability challenges. We know more
needs to be done. To truly support first-time
buyers, we need action to ensure more affordable
homes are built and to ensure Government
policies provide the right conditions both for
the society and our members to thrive. We will
continue to campaign on issues that matter to
our intermediary partners and their clients.
