The new range is structured across four tiers:

• Standard products – for applicants with limited or no recent adverse credit
• Near prime – for borrowers with minor credit issues
• Credit impaired – for those with more significant historic adverse
• Credit repair – the Society’s highest-ranking adverse product, specifically developed to support applicants with the most recent and challenging credit events.

The new credit matrix outlines how each product tier supports borrowers with a wide spectrum of issues, including defaults, CCJs, IVAs, DMPs, repossessions, and bankruptcy. For example, applicants with defaults registered within the last two years or unsatisfied CCJs may still be eligible under the credit repair product, while those with older, satisfied events can often be placed into lower tiers with higher LTV options.

To complement the launch, The Loughborough has introduced an online adverse tool, helping brokers quickly determine product eligibility at the pre-DIP stage. This ensures faster, more accurate case placement and helps brokers manage customer expectations from the outset.

The proposition is further strengthened by The Loughborough’s recently launched decision engine, which automatically identifies adverse credit issues within an application and cascades outcomes to the appropriate tier. This allows for a more streamlined process while preserving the Society’s hallmark of personalised underwriting.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“We are proud to launch a truly comprehensive adverse lending proposition that reflects the realities of today’s market. Many borrowers have experienced financial challenges in recent years, and our new tiered structure, supported by smart technology, ensures that brokers can place more cases with greater confidence.

By combining our online adverse tool with the intelligence of our decision engine, we’re giving brokers the clarity and speed they need, while offering customers fair, responsible access to mortgage solutions that suit their circumstances.”

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As part of its ongoing strategy to enhance intermediary distribution, Loughborough Building Society remains committed to working closely with intermediary partners to deliver flexible, customer-focused solutions that respond to evolving borrowing needs across all stages of the lending lifecycle.

The Society recently launched its new mortgage origination platform, complete with integrated credit decisioning software, to further improve these intermediary relationships. Enhancements include soft credit checks during the Decision in Principle (DIP) stage, helping to protect applicants’ credit scores while allowing them to explore mortgage options. Additionally, the platform features enhanced case-tracking functionality and secure integration with selected solicitor panels.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“Joining the PMS panel is a natural step in extending our intermediary footprint and making our proposition more widely accessible to brokers seeking flexible, considered lending options.

“We’ve worked hard to build a product range and service model that reflects the realities of modern borrowers, and we know that advisers value not just product availability but also lenders who are willing to take a pragmatic, case-by-case approach. This partnership opens new doors for advisers, and ultimately, for the clients they support.”

Claire Cherrington, DA Distribution Director at Sesame Bankhall Group, added:

“As a proactive partner for life, we support our advisers through every stage of their business journey—whether they are looking to start, run, grow, or exit their business. Loughborough Building Society’s comprehensive range of mortgage solutions, from first-time buyers to later life lending, and their commitment to individually underwritten applications without credit scoring, exemplify the kind of flexible, customer-focused approach we value. This addition to PMS Mortgage Club’s panel will enhance the options available to our advisers, enabling them to better serve their clients with tailored solutions across various lending needs.”

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Additionally, the Society has expanded its range of assessable benefits, further improving accessibility to homeownership for a wider pool of applicants.

The following benefits will be assessed at 100% of income: Universal Credit, Child Benefit, Job Seekers Allowance, Pension Credit, Carers Allowance, Attendance Allowance, and Constant Attendance Allowance.

The following benefits will be assessed at 50% of income: Working Tax Credit, Child Tax Credit, Personal Independence Payment, Disability Living Allowance, Employment & Support Allowance, and Adult Disability Payment.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“This enhancement reinforces The Loughborough’s commitment to adapting its lending criteria to better serve the needs of modern borrowers, ensuring more people can access the right mortgage solutions for their circumstances.

“The Loughborough is dedicated to making mortgage lending more inclusive and we recognise the unique challenges faced by borrowers relying on Universal Credit and other benefits. Our new calculator accounts for these complexities, offering a clear understanding of assessable income when determining mortgage affordability. This ensures our intermediary partners can provide clear, simple and accurate guidance to those who need it most.”

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This has led to more homeowners feeling the financial squeeze, with some struggling to meet mortgage repayments and general living costs, while others have been forced to make significant cutbacks to the way in which they live their lives.

The challenges around mortgage affordability look set to remain in 2025 and beyond, as interest rate fluctuations, stagnant income levels and high house prices continue to exacerbate longstanding affordability issues.

Addressing these affordability challenges has been a key priority for lenders over the last 12 months, many of whom have sought to implement strategies and enhance lending criteria to help support borrowers to maintain financial stability and buy a home.

The old-school way of assessing mortgage affordability no longer fully serves the needs of every modern-day borrower, as a growing number have multiple or varied income streams; will live and work for longer than their parents and grandparents; and buy their first home much later in life.

This means lenders need to work closely with the intermediary market to understand what challenges their clients are facing and adapt mortgage products accordingly so they allow more borrowers to access the property market.

As a lender who actively engages with our intermediary partners, we continuously seek feedback that highlights the borrower’s concerns, helping us refine and evolve our proposition to better serve their needs. Most recently, this involved increasing the LTV on our 5.5x income multiple calculation from 85 per cent to 95 per cent to provide greater borrowing potential for residential borrowers who meet our lending requirements.

The enhancement provides greater flexibility for many borrowers, especially the self-employed with only one year’s accounts and higher-income applicants seeking more flexibility in their mortgage options.

Greater flexibility around the underwriting process is important when it comes to improving affordability, which is why we also plan to extend the types of income accepted across certain products. This will enable borrowers to include income earned from overtime, bonuses and commissions in their mortgage application, up to a maximum 75% LTV. Borrowers working a second job can now also include 100% of the income earned from their secondary occupation, irrespective of whether it relates to their main occupation.

As well as enhancing lending criteria, there are many other products specifically aimed at helping borrowers facing affordability challenges already in the market. Government-backed schemes such as Shared Ownership, Discount Market Value and First Homes mortgages, for example, have all been created to help borrowers overcome affordability hurdles by purchasing a home at a reduced rate.

Products like Joint Borrower Sole Proprietor (JBSP) mortgages are also growing in popularity, enabling borrowers to boost their borrowing power by combining the incomes of up to four family members to purchase a property.

This can be an extremely helpful way for parents to support their children’s homebuying aspirations, without having to gift a lump sum for the deposit. It can also prove a more affordable solution in the current climate as they can use their income, home or savings as a security rather than gifting money.

Recognising the affordability challenges many borrowers face is crucial in today’s mortgage market, and lenders play a key role in easing financial pressures. This requires proactive steps to develop innovative products, policy and criteria that help borrowers navigate economic difficulties and expand access to solutions that support their borrowing needs in a sustainable and affordable way. And this is a role which will continue to evolve to reflect ever-changing economic, market and borrowing demands moving forward.   

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The minimum income requirement remains at £50,000 for sole applicants and £75,000 for joint applications and applies across The Loughborough’s residential mortgage range.

Additionally, the Society maintains its flexible approach to credit history, retaining its potential to disregard any defaults which have been resolved over two years and CCJs settled over three years. Historical defaults on telecoms, mail order, utilities, or bank accounts can also be disregarded if resolved at least three months prior to the mortgage application.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“This enhancement reinforces The Loughborough’s commitment to adapting its lending criteria to better serve the needs of modern borrowers, ensuring more people can access the right mortgage solutions for their circumstances.

We recognise the challenges many borrowers face when trying to secure the borrowing they need, particularly those who are self-employed or have seen recent income growth. By increasing our income multiple to 5.5x up to 95% LTV, we’re providing a more flexible and expansive solution that enables those looking to purchase or remortgage to maximise their borrowing potential in a responsible manner.”

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Following the outstanding success of the inaugural event held at Leicestershire County Cricket Club in November 2023, the ‘Five Foxes’ are set to bring their unique insights and expertise to intermediaries across the UK. Four regional events will be hosted in Southampton, Exeter, Wetherby, and Warrington, with dates and timings to be confirmed in the coming months.

This intermediary-focused series aims to provide attendees with invaluable perspectives from each Society, both individually and as a collective. Highlights of the event will include:

• Insights into the history and legacy of each Building Society.
• An overview of their distinctive lending approaches.
• Guidance on how brokers can leverage these insights to grow their business and better serve their clients’ evolving needs.

Gary Brebner, CEO at Loughborough Building Society commented:

“Building on the success of our previous event, and the numerous conversations it has since sparked, we felt it was essential to bring this initiative back and extend it to intermediaries across the UK.

“While each Society maintains its own unique approach and USPs, we’re united in our mission to deliver specialist lending solutions that truly impact a diverse range of borrowing needs. We hope brokers nationwide will recognise this commitment and identify the opportunities on offer as we take this exciting event on the road throughout 2025.”

Barry Carter, CEO at Hinckley & Rugby Building Society said:

“We’re delighted to once again team up with some of our fellow Leicestershire-based societies to spread the word about how we, as lenders, are providing innovative solutions to meet the changing needs of borrowers. 

“Building societies have a hugely important role to play in the UK mortgage market and so it’s vital that we invest in events such as these to ensure intermediaries nationwide are aware of our respective propositions and how they can help more and more borrowers achieve their home ownership aspirations.”

Simon Taylor, CEO at Melton Building Society, remarked:

“Following the great success of our first event. I am delighted that we will be engaging our broker communities across the UK. These events really help shape our product and distribution strategy  at The Melton and I am looking forward to the great conversations that will flow.”

Scott Devereux, CEO at Earl Shilton Building Society, stated:

“We’re thrilled to once again join forces with our fellow Leicestershire-based societies to highlight how we, as lenders, are delivering innovative solutions to meet the evolving needs of borrowers.

“Building societies play a vital role in the UK mortgage market, offering tailored and customer-focused lending options. Through events like Leicestershire Lenders Live, we aim to ensure intermediaries across the UK are fully aware of our unique propositions and how we can help more borrowers achieve their homeownership aspirations. We’re excited to bring this initiative to new audiences in 2025.”

Iain Kirkpatrick, CEO of Market Harborough Building Society, added:

“With five unique and successful building societies in Leicestershire all offering brokers more choice for their clients, it makes sense that we join forces to spread the message not just locally but with brokers we can help across the country.

“As more brokers look to diversify in 2025, these events will provide a handy snapshot of how regional societies can support both traditional and specialist forms of lending, including bridging finance. And it’s time to show that larger doesn’t always mean better. We’re agile and can adapt to the changing market to best support broker and client needs.”

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Plans to tackle England’s housing shortage have recently been outlined by the new Labour government, with increased focus and targets being given to areas where housing is least affordable.

The aim is for 370,000 new homes to be built in England every year, with a promise made by Housing and Planning Minister Matthew Pennycook to create 1.5 million new homes within the next five years.

With local authorities being told to give developers permission to build, the announcement is a bold move by the government, which it hopes will go some way to addressing the housing crisis across the UK.

According to government figures, there are 1.3 million households on social housing waiting lists and 160,000 children in temporary accommodation; not to mention the millions of people who are unable to afford to buy their first home.

While time will tell whether the government will succeed in reaching its lofty housebuilding target, the announcement does however, shine a light on the ongoing need for workable solutions that help borrowers achieve their homeownership goals.

Shared ownership mortgages have been offering a homebuying solution to qualifying borrowers since the product was first launched in the 1980s. Since then, demand for the product has remained high as house prices have continued to rise over the years and the need for larger deposits has also grown.

One challenge of the scheme is that shared ownership mortgages are limited to qualifying properties, which makes the government’s focus on building more affordable homes a welcome development for the sector. On the positive side, saving for a deposit is often more achievable, as these are typically between 5% and 10% of the share purchased, resulting in a lower initial outlay for the borrower.

Over time, and as budgets allow, borrowers can also increase their share of the property by “staircasing” to buy a larger stake. This helps them build more equity in the property and lays the foundations for greater financial wealth.
  
Traditionally, staircasing has been capped at a maximum share of 75%, but there are alternatives. Here, at The Loughborough, we’ve recently enhanced our shared ownership mortgage solution to offer up to 95% of the share borrowers can staircase to when they remortgage.

This provides those borrowers taking out a shared ownership mortgage with the opportunity to own a larger share of their home, encourages greater longevity in the scheme and helps to set them on the path to full homeownership further down the line.

Shared ownership mortgages can be taken out on a variety of properties, including new build houses, new build flats and second-hand flats, with LTVs ranging from 95%, 90% and 80% respectively. As previously stated, staircasing is also now acceptable at up to 95% of the share, and a minimum share of 25% is required in all cases.

Some lenders in this space adopt a more personalised underwriting approach, enabling them to offer flexible product features tailored to each client’s unique needs. This can be particularly beneficial for self-employed applicants with just one year of employment history and financial records, rather than the usual two.

Borrowers with a history of adverse credit, such as those with CCJs or missed payments, can also be considered. We even accept benefit income provided it does not exceed 50% of the applicant’s total income. Mortgage terms are also available up to a maximum of 40 years to demonstrate how accommodating many specialist offerings can be in this product space.

As we approach 2025, hopes for greater economic stability and an increase in affordable homes offer new possibilities for borrowers aiming to step onto the property ladder. This also presents intermediaries with a chance to collaborate with lenders providing shared ownership solutions, and in supporting a wider array of clients who are seeking more accessible routes to homeownership.

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Discount mortgages are a frequently misunderstood area of the mortgage market, but for the right borrower, they can be a useful financial tool offering greater flexibility over their monthly mortgage payments and future needs.

While it’s true that many borrowers tend to prefer the certainty of a fixed rate product, especially in a period of economic instability, there are circumstances where a discounted mortgage product may prove more attractive and better suited to clients’ needs.

A common misconception around discount mortgages is that the interest rate can fluctuate wildly on a regular basis, leaving borrowers with the risk of being unable to cover the cost of the mortgage.

While, of course, it’s important to stress test affordability at the highest possible level to ensure borrowers can continue to repay the mortgage, it’s also important to note that the discounts on offer are directly related to a lender’s SVR and not the Bank of England base rate.

This means that any decision to increase or decrease the SVR is made by the lender. It also means that if the Bank of England increases or decreases the base rate, it doesn’t mean the lender will follow suit.

Discounted mortgages can offer greater levels of flexibility for those borrowers who may find themselves in a position to regularly overpay. This can be an ideal solution for borrowers with more cash at their disposal or those who can afford to absorb any fluctuations in payments that may occur over the mortgage term.

Unlike fixed rate products, it can be the case that there are no limits or penalties for overpaying, which can help those borrowers with potentially more irregular income streams who may be looking to clear their mortgage faster. This can be particularly useful for borrowers who know they are coming into a large amount of money during the mortgage term, perhaps due to selling other assets or coming into some inheritance.

Although paying off a mortgage before the end of the deal often comes with an early repayment charge (ERC), these ERCs can be much less onerous with a discount mortgage, ensuring that borrowers can make further savings should they need to exit the loan early.

For example, here at the Loughborough, the ERC on our discount product range is currently set at 0.5% in the first year and 0.25% in the second year. The equivalent of only £1,000 on a £200,000 loan in the first year of the mortgage and £500 in the second year, depending on the total balance and term left at the time of redemption.

This can be an attractive proposition for those borrowers who may require an option to leave the mortgage before the end of the current term or those who may benefit financially from moving early to another mortgage product due to expected or unexpected positive market movement.

Admittedly, a discount mortgage may not appeal to every borrower, and while there will always be situations where a discounted mortgage will not represent the best fit for the client, there will also be cases where the flexibility of a discount mortgage can be of great benefit. Key factors to underline how discounts are playing an increasingly prominent role in the advice process for many borrowers.

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Loughborough Building Society has announced a criteria change to its lending in retirement proposition which will allow borrowers to raise capital in order to bolster their savings pot.

Cases will continue to be assessed on an individual basis with applicants potentially able to raise funds for a combination of purposes including home improvements, debt consolidation, gifts to family, new car, care home fees, holidays, deposit on a second home/buy-to-let property and/or to replenish their savings.

This improvement is designed to further strengthen The Loughborough’s unique approach to later-life lending and its comprehensive product offerings. It follows a significant enhancement to its lending in retirement proposition in September 2024 when the Society moved to assess income at 4.5x up to the applicant’s retirement age, marking a notable increase from its previous 3.5x income assessment.

For applicants already aged 80 or over, The Loughborough will continue to consider applications with a maximum income multiple of 3.5x for both single and joint applicants.

Ashley Pearson, Head of Intermediaries at Loughborough Building Society, commented:

“As a Society, we continually strive to adapt and evolve our product offerings to better meet the needs of borrowers throughout their lending journey. This latest enhancement to our lending in retirement criteria demonstrates our ongoing commitment to providing flexible and responsible solutions, empowering borrowers to make the most of their later years and achieve their financial goals with the support they deserve.”

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The UK mortgage market has undergone significant change over the last few decades, with shifting social dynamics, high and rising house prices and stagnant wages all playing a major role in the changing mortgage landscape.

With the average UK home costing 8.8 times the average earnings last year, according to House Buyer Bureau research, many would-be homeowners are also struggling to save for a deposit to buy their first home. The impact of this has been a change in the average profile of the UK mortgage.

In recent years, there has been a significant amount of emphasis on intergenerational lending and the Bank of Mum and Dad, much of which has focused on the uptick in the growth of gifted deposits and sizeable loans to help younger generations buy their first home.

However, recent economic challenges have seen a new type of intergenerational borrowing begin to emerge, with more parents joining forces with their children to buy a home that they also own, or indeed, live in, alongside their children.

We’re often asked by brokers about how this type of mortgage works in practice, particularly given the age differences between parents and their children. In some cases, this generational gap can be anything up to 35 or 40 years.

Many of these questions specifically relate to how affordability is assessed, given the fact that the parents are often in, or approaching, retirement age, but may have more income or wealth than their children.

While each application is assessed on its own merit, as a general rule, we would typically assess affordability on the youngest person’s income, provided we do not need to include the older person’s income to secure the mortgage.

For example, we recently received an application from a mother and father aged 85 and 84 respectively who were looking to remortgage a property. Their 55-year-old daughter lived with them, and they decided they wanted to include her in the ownership of the house, so the property was remortgaged in all their names.

However, only the daughter’s income was used for affordability purposes on the mortgage as it was enough to satisfy lending requirements. In this situation, the parents were able to remortgage the property as required and remain living in it with their daughter, who is now one of three legal joint owners.

There was also a case where parents wanted to buy a bigger house with their son and daughter and their part of the deal was to finance the deposit. In this case, the income of the children was used for affordability purposes, but the parents were also named on the mortgage. This allowed them to buy a bigger house to live in together, so that the children can care for their parents in the future.

It’s also worth noting, however, that it’s not just applications from parents and their children where a significant gap in age can occur. We recently had an application from a husband aged 77 and his wife, aged 37, who were looking to remortgage away from their current lender.

As the affordability fitted with just the wife’s income, we could consider the loan to value (LTV) and term of the younger applicant and not the older applicant. However, the husband was still named on the mortgage and remained a joint owner of the home.

Given the affordability challenges facing many borrowers over the last few years, brokers are likely to see more applications from people clubbing together to buy a home. Some of the cases may well include applicants over the age of 50 or with a large gap in age between the borrowers.

Speaking to a flexible lender who is familiar with handling such cases can help to ensure the application is successful.

It can also help brokers gain an understanding of mortgage applications with large age gaps and ensure their clients get the financing they need to buy a home.

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