Two big headlines this week: The FCA announces an open bank mortgage test and the chancellor is considering tax rises and spending cuts in the upcoming budget.
Explore these and other key industry updates below:
FCA to launch Open Banking mortgage trial
The Financial Conduct Authority has announced that it will launch an Open Banking mortgage test next month and conduct a three-month “technical sprint” from November 17.
Mortgage companies are invited to trial data-sharing ideas aimed at improving access, affordability and consumer understanding. The program is led by technology company Raidiam and is part of the FCA’s wider smart data accelerator work.
Further open banking trials for SMEs are planned for February, continuing its mission to drive digital innovation.
Chancellor admits she is ‘considering’ budget tax increase
Chancellor of the Exchequer Rachel Reeves has confirmed she is weighing tax increases and spending cuts in the November budget, aiming to plug a £20-30bn gap. While she ruled out raising income tax, VAT and national insurance, she hinted property taxes could rise.
Proposals include a new seller-paid property tax, an annual local tax to replace council tax and national insurance on rental income – all part of Labour’s bid to restore fiscal credibility.
Reeves: Raising taxes on the rich will be ‘part of the budget story’
Chancellor of the Exchequer Rachel Reeves has confirmed that tax increases on the rich will be “part of” the November budget, with a focus on capital gains, inheritance tax and savings tax. Speaking in Washington, she dismissed “scaremongering” about tax evasion and insisted Britain remained attractive.
Speculation is swirling about gift limits, Isa cash cuts and a potential “redundancy tax”. Reeves aims to raise up to £30bn, balancing fairness, fiscal prudence and politics.
Mortgage rates rise for first time in eight months
Moneyfacts revealed that mortgage rates rose for the first time in eight months, with average two-year and five-year fixed rates rising 0.02% to 4.98% and 5.02%. As swap rates fluctuated, lenders became cautious and the average shelf life of mortgages extended to 22 days.
Despite the complaints from borrowers, experts note that interest rates remain well below last year’s highs and product selection for low-deposit buyers is at a 17-year high — and it’s not all doom and gloom.
e.surv House prices in England and Wales fell 3% year-on-year in September
House prices in England and Wales fell 3% year-on-year in September to £355,100, e.surv said. While sales volumes stabilized after earlier distortions, prices were flat month-on-month amid economic turmoil and budget tax concerns.
The south, particularly the south-east, saw the biggest falls, with only London rising slightly. Analysts point to downsizers and landlords adding to supply, but demand fundamentals suggest confidence could rebound with the right policy stimulus.
Barratt & Persimmon partners with Barclays and TSB to launch new 5% deposit home ownership scheme
Barratt Redrow and Persimmon have partnered with Barclays, TSB, QSix and Ahauz to launch the Rezide equity loan, a scheme that allows buyers to purchase a new-build home with just a 5% deposit.
The loan covers 15% of the property’s value, with the remaining 80% financed through a mortgage. The scheme, aimed at first-time buyers and home movers, aims to ease deposit pressure by making it easier for buyers to secure a home after Help to Buy ends.
Pepper Advantage appoints Golding as first Group Chairman
Pepper Advantage has appointed OSB Group chief executive Andy Golding as its first group chairman following its acquisition by JC Flowers. Golding brings extensive experience from Saffron Building Society, NatWest and Bradford & Bingley and joins to guide Credit Management’s strategic growth and technology innovation.
His goal is to support the executive team as Pepper Advantage expands its PRISM platform.
Recent board members Antoinette Dunne and Mark Nieuwendijk also strengthen leadership during this period of change.
Barclays raises caps on bonuses, overtime and commissions
Barclays has increased the cap on earnings from bonuses, overtime and commissions considered in mortgage affordability calculations to four times basic salary plus allowances. This means buyers with high commissions now see more revenue being recognized, increasing borrowing potential.
Lee Chiswell, head of mortgages at Barclays, said the changes were aimed at helping first-time buyers and others previously restricted by affordability rules, making it easier to buy a home and reducing barriers for a wider range of customers.
Reeves must avoid ‘half-baked’ property tax fix in budget: IFS
The Institute for Fiscal Studies has urged Chancellor Rachel Reeves to avoid a “half-baked fix” to property tax ahead of the November 26 budget.
It calls for the abolition of stamp duty, the modernization of council tax and the introduction of recurring property tax based on the latest value.
The thinktank believes a well-designed property tax would raise revenue while minimizing economic damage, allowing Reeves to fill a £20-30bn fiscal gap while supporting growth and equity in the housing market.
Ministers have power to stop councils from refusing planning permission
As part of the Planning and Infrastructure Bill, ministers were given new powers to stop councils from refusing planning permission for major housing and infrastructure projects. “Reserved directions” now allow intervention while the invocation of powers is being considered, speeding up approvals and reducing legal delays.
Housing Secretary Steve Reid hailed the changes as a “colossal shift” in building 1.5 million homes, while experts pointed out that releasing long-term vacant homes could increase supply faster and more sustainably.
