"Santander has not given much away about what exactly has improved. Could they be one of the first lenders to remove the stress-testing element of mortgage affordability?"
From today, Santandar is decreasing all of its residential and most buy-to-let affordability rates.
In a statement to brokers, Santander said: "This means that most of your clients will be able to borrow more than before, while also ensuring we meet our obligations as a responsible lender."
PR platform, Newspage, sought the views of brokers.
Craig Fish, founder and director at Lodestone Mortgages & Protection: "This is great news and a sign of more normality returning to the market for both residential and buy-to-let clients. It's a clear indication of lenders' ability and willingness to lend and confirms that the mortgage market remains open for business. It further confirms lenders are in a much stronger position than they were back in 2008, and that the future looks positive."
Benjamin Blyth, director at Houz Mortgages: "Although they've announced positive changes, Santander has not given much away about what exactly has improved. Could they be one of the first lenders to remove the stress-testing element of mortgage affordability? Those with a very good memory will recall at the start of 2022 that 'mortgage borrowing would get easier' because of the removal of this rule by the FCA. Prudently, not many lenders actually changed their policy on it because it's simply a good test to ensure borrowers can afford their payments if rates increase. And we all know what happened next. Elsewhere, lenders have amended their affordability assessments to account for higher living costs and household outgoings, in line with ONS figures. This has made affordability slightly tougher so it's great to see Santander combat it with a more generous approach."
Jamie Lennox, director at Dimora Mortgages: "This is a reassuring move from Santander and shows that they are still keen to lend in the challenging environment that we are entering. If we also read between the lines, it may also signal that they don't see the base rate going up as much as they first thought or that fixed mortgage deals may continue to fall for a period of time, and that we are over the worst of it."
Lewis Shaw, owner and mortgage broker at Riverside Mortgages: "This move by Santander is welcome news. However, this does not mean they'll be sat at the top of the rate tables; they'll simply be back in the mix. Santander has been so far down the rate lists for weeks they must now be in a position to get some new business in, and the easiest way for them to do that is to price their rates so they become competitive once more. However, do not confuse this with a rate war, it's simply to bring themselves in-line with the rest of the market. Nothing more, nothing less."
