The Intermediary – October 2026 - Flipbook - Page 9
RESIDENTIAL
Opinion
Stalling price
growth doesn’t
solve affordability
A
corner seems to have
been turned when
it comes to house
prices. The latest
Private Rent and
House Price data from
the Office for National Statistics (ONS)
reported a monthly fall in prices, with
annual growth slowing, while the
Lloyds house price index, which uses
more up-to-date figures, found house
prices have actually fallen year-onyear for the first time since 2023.
For aspiring buyers, who have seen
property prices stretch ever further
out of reach, this shi is most likely
welcome. But it’s important not to
lose sight of the fact that a house
price slowdown, or even momentary
fall, does not solve the affordability
challenge so many buyers face.
It’s this challenge that both the
Government and lenders need to
focus on.
It isn’t easy
When we talk about mortgage
affordability, a lot of the focus is
understandably on the monthly
repayment, and ensuring that the
borrower can comfortably cover those
outgoings. At a time of fluctuating
interest rates, establishing what
is genuinely affordable and where
payments become unsustainable is
incredibly important.
But there is also the question of
how much a borrower can obtain.
With house price growth so consistent
over recent years, the mortgage sum
needed has grown too, and this is
where borrowers can find things
difficult should they be constrained
by loan-to-income limits. They might
be perfectly capable of meeting the
monthly repayments required, but
have lile chance of actually obtaining
the level of mortgage needed because
of the sticking point in the criteria.
A sudden fall in house prices doesn’t
mean this issue is going to go away any
time soon.
In fact, when we look at the regional
breakdown of house prices, they aren’t
stalling for most people anyway – the
ONS data shows that while London
and the South East have seen prices
fall, they continue to grow everywhere
else, suggesting loan-to-income (LTI)
levels will remain a key consideration.
Can we do more?
If we want to make homeownership
more accessible, and more achievable,
then clearly we – as lenders – must
do more. Just allowing everyone
to borrow more isn’t the answer,
responsible affordability assessments
need to remain at the heart of how the
industry operates.
But we can regularly review our
criteria, and work closely with
brokers to establish particular areas
where some additional flexibility
would make a meaningful difference
to borrowers who might otherwise
struggle to access the mortgage sums
they need.
It’s something we did recently
at Atom bank, increasing the LTI
available across our Prime and
Near Prime ranges on loans of up
to 90% loan-to-value (LTV). The
shi specifically applies to those
with household incomes of between
£45,000 and £60,000, and may mean
they can increase their maximum
potential loan by as much as £31,000.
That sort of shi can make a huge
impact on a borrower’s prospects,
opening up a far broader range of
properties, rather than forcing them
to limit their ambitions or even
abandon them altogether.
This isn’t about viewing LTI in
isolation, but recognising that it’s one
CHRIS STOREY
is chief commercial officer
at Atom bank
of a range of levers open to lenders
which can be used to support those
looking to get onto, or move up, the
housing ladder, while remaining
responsible in our lending.
A bigger role
The changing affordability landscape,
and the interest rate volatility, simply
highlights the importance of brokers
at the moment.
Understanding the nuances
between lenders is essential in the
advice process today – it’s not just
about determining the lowest rate,
but who offers the best overall value
for the client. That covers everything
from the sums available to the service
levels on offer.
There’s lile point going with a
lender that promises the world, but
takes months to actually assess an
application, by which point the client
has missed out on the property and
taken their business elsewhere.
By contrast, the lenders that are
responsive to broker feedback around
areas like criteria, and that deliver a
smooth process, are beer positioned
to help brokers win more business.
House prices may well continue to
fall over the rest of the year, but that
won’t mean much for buyer prospects
if they can’t access the mortgage sums
they need. Now is the time for lenders
to ensure they are considering all
the options open to them to support
buyers; interest rates and LTVs can
only do so much. ●
October 2026 | The Intermediary
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