Reed Smith was a proud sponsor of DealCatalysts’ Second Annual Investors’ Conference on UK Mortgage Finance in London on 12 September 2023. Below is a summary of our key takeaways and industry perspectives from the conference.

Key takeaways and industry perspectives

  • Rating agencies projected an overall 10% decline in house prices but noted that most of this had already played out in the market. They expect house prices to stabilise in 2024.
  • Falling house prices over the past 12 months have led to a tightening in LTV risk profiles from 70-75% to 80-85%. However, the reduction in deals means that some lenders have maintained 70-75% LTVs to win market share.
  • 15-20% of landlords have been passing on increases in mortgage interest to their tenants for new lettings, resulting in a 7.5% increase in the rental market this year.

Opening remarks

Rick Watson | Managing Director – AFME

  • There has been political agreement between EU member states regarding the CRR mitigation measures to be adopted by the UK.
  • AFME welcomes UK policy changes to new Securitisation Regulation – which is anticipated to remove various barriers to issuance. Aspects of the EU framework will be revisited.

Keynote speaker: Emerging policy developments and their anticipated impact on the housing market

New consumer duty

  • New Consumer Duty regulations came into force on 31 July 2023 for all products and services that are open to sale or renewal. It will apply to all closed products and services (i.e. those that are not currently on sale/open for renewal) from 31 July 2024 to give firms a little more time to consider products that they may have sold in the past that are still held by customers, raising the bar for consumer protection.

Mortgage Charter

  • UK government has agreement from lenders to provide a series of new and voluntary commitments for borrowers to better manage their finances including various offers to temporarily reduce payment of mortgages by offering for example, interest only mortgages or by extending term of existing mortgages.

FCA Tailored Support

  • FCA had a closed consultation of their “tailored support” scheme introduced following covid. Guidance is now permanent in the FCA handbook.