The Intermediary – March 2026 - Flipbook - Page 34
T H E I N T E RV I E W
Santander
Over the past decade, however, that
perception has gradually shifted, with other
lenders becoming more closely associated with
specialist first-time buyer solutions.
“Over the last 10 years, we’ve sort of lost that
view,” Sellar adds. “People don’t look at us as a
first-time buyer lender so much anymore.”
The introduction of the 98% product, he
explains, is a clear signal to brokers that
Santander remains committed to supporting
new entrants to the housing market.
He adds: “The idea of the 98% product is
to put a message to market that we want to
help those customers. It says 98%, but it’s a
£10,000 deposit mortgage, so it can be slightly
lower than 98%. But it’s there to say to the
intermediary market: we’re here to help you
with your first-time buyers.”
This forms part of a wider suite of first-time
buyer options, Sellar explains: “We’ve also
got products at 90% and 95% LTV, too. And
obviously, the bigger deposit you put down, the
better the rate tends to be.”
More broadly, he hopes that the launch acts
as a signpost for brokers to re-engage with
Santander’s wider first-time buyer offering.
Sellar adds: “It’s about letting them know
we’ve got lots of USPs for first-time buyers
that many brokers may not be aware of. Things
like Bank of Mum and Dad, 40-year terms and
allowing mortgages to customers up to the age
of 75. All of that is stuff that brokers sometimes
have forgotten. The launch is ultimately about
supporting more first-time buyers and this is
just a way of helping us with that message.”
The emergence of ultra-high LTV products
inevitably invites comparisons with the pre2008 mortgage market, when lending above
95% was significantly more widespread.
However, Sellar believes the modern context is
fundamentally different, with lenders taking a
far more cautious approach.
He frames the product as a targeted
response to the three key barriers faced by
first-time buyers: “The first is loan-to-income
– how many times their income they can use
to buy a property, the affordability aspect. The
second is the deposit. And then the third is the
monthly costs –how much does it cost every
single month for the mortgage?”
Recent regulatory changes have helped
ease the first of those pressures, namely
clarifications from the Financial Conduct
Authority (FCA) and adjustments to loan-toincome (LTI) guidance from the Prudential
Regulation Authority (PRA) during 2025.
“Across the market, many lenders can lend
around £30,000 more than before,” Sellar says.
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The Intermediary | March 2026
At the same time, mortgage rates have
gradually eased from the peaks seen during the
inflation shock of 2022 and 2023, improving
monthly affordability for many borrowers. Yet
the challenge of saving a deposit remains.
Sellar says: “As we all know, the cost of living
is still high. Buying a coffee costs £3.80 these
days; people have less money. So, deposits are
harder and harder to save for.”
He continues: “Now, a lot of people’s deposits
are held by Bank of Mum and Dad and Gran
and Grandad, and we’re very receptive to these
options. But not everybody has got a Mum and
a Dad or a Gran and a Grandad who can help.”
Santander’s 98% mortgage is therefore
intended to provide an additional pathway into
homeownership, rather than a wholesale shift
in lending practices.
“The point of high LTVs is that they open the
door for some of those customers who haven’t
got other options,” Sellar says.
Santander has placed strict controls around
the product to ensure it remains within
responsible lending parameters.
Sellar notes: “We maintain strict controls over
the levels of business we carry out. We’ve got
very tight controls, and the amount of business
we will do in this space is a small amount
against our larger lending.”
He adds: “The 98% product is really about
helping the right customers. It’s not about
changing the shape of lending in the UK – it’s
filling a gap.”
Santander has introduced relatively narrow
eligibility criteria, restricting the product to
straightforward borrower profiles.
“We don’t use this product on flats, the selfemployed, or where there’s any sort of adverse
credit.,” Sellar says.
It is primarily targeted at what Sellar
describes as “vanilla” borrowers – applicants
with stable employment, strong credit profiles
and relatively simple financial circumstances.
The cautious rollout reflects lessons learned
from the financial crisis, when high-LTV lending
became associated with higher levels of risk.
Sellar continues: “As time goes on and
we learn more about this market again and
understand about customer profiles, the policy
may get expanded, but at this time it’s quite
narrow. It’s just another offering on the shelf
for customers in that particular space who are
struggling to get onto the property ladder.”
Technology as an enabler
Beyond product development, digital
transformation remains a major focus across
the mortgage industry, particularly with
