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"Logic disappears into thin air when what is deemed to be affordable by a lender, and loaned, is then considered unaffordable"

Journalist:

ended 06. May 2025

A broker has an ongoing issue with Barclays where an existing Barclays Premier Account and Barclays mortgage holder is trying to obtain a further advance to consolidate a second charge and two Barclays unsecured loans. The client would be £860 per month better off overall, but is being told their borrowing isn't affordable, even though it will all be secured.

What started as a request of £108500 (which met affordability as calculated by Barclays staff) of further borrowing has now resulted in them calculating that they can't afford to borrow what they already have, despite Barclays lending a substantial sum unsecured, which they already owe even though their income is fully evidenced and legal.

Customers are at the end of every transaction as well as the brokers who but substantial amounts of time and effort in which should not be overlooked. We are also the conduit for passing on the information from the lenders to clients which, when it is wrong or inconsistent, lenders hold very little accountability of and, in many cases, brokers don't have access to underwriters or BDM support. Is this fair and appropriate to Consumer Duty?

  • Should lenders look at unsecured debt in the same way as secured for affordability purposes?
  • Is out-sourcing a help or a hinderance?
  • Should underwriting/underwriters have more autonomy?
  • When is loyalty not loyal?
  • Do you have any other tales of inconsistent underwriting resulting in disadvantaging the borrower outcome?

6 responses from the Newspage community

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Editor
Michelle Lawson
Director at Lawson Financial
Logic disappears into thin air when what is deemed to be affordable by a lender, and loaned, is then considered unaffordable when a borrower seeks to make the loan more affordable with that same lender. We need lenders that can take a view and apply common sense where needed in this modern world. This case is ongoing and frustrating. Lenders have cut costs and appear to not be fully training and monitoring staff and the job of broker is far more than sourcing and advising on mortgages now as we are troubleshooting and fire-fighting more than ever before. A relationship with a lender can also make or break a deal and lenders should not just rely solely on their brand for business. The lenders that work best are those with clear, consistent and transparent policy and underwriting. Many brokers' reputations are on the line, too, which shouldn't be overlooked.
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Justin Moy
Managing Director at EHF Mortgages
This feels like an ever-growing problem with some lenders where they have little or no case ownership within the underwriting team, so you end up with too many opinions and in some situaitons common sense does not prevail. It is certainly much easier for people to be agreed an unsecured loan for a kitchen or car without too many checks, in this case i know that the same lender also facilitiated that unsecured credit, is also taking a monthly membership fee for their Premier Banking service, but isn't delivering their gilded 'premier' service nearly 3 months on from the original application. Lenders continue to provide such a mixed level of service without any thought about the end client, treating customers unfairly perhaps.
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Tony Redondo
Founder at Cosmos Currency Exchange
Barclays have fallen down the rabbit hole and had too many cups of tea with the Mad Hatter. How can it make sense for a bank to deny a client a further secured advance to consolidate debt, citing affordability issues after lending the same client on an unsecured basis? The client saves £860 per month, and the bank has a less risky secured loan on its books. Unsecured debt should be weighed differently than secured debt. Outsourcing is done to save the bank overhead but causes delays and inconsistencies, while limiting underwriter autonomy and lack of BDM access hurting brokers and clients, breaching Consumer Duty’s fair treatment principles. This, like NatWest’s 2023 remortgage rejection over a settled credit blip, shows widespread inconsistent underwriting, often ignoring context, leaving borrowers worse off. Lenders must reform, voluntarily or otherwise, and assess debt pragmatically, empower in-house underwriters, and ensure accountability to prioritize borrower outcomes.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
Unfortunately, common sense is not common when it comes to underwriting. Most applications get packaged by admins rather than underwriters before it even gets to underwriting and they don’t understand certain aspects of a mortgage or a mortgage process and are just following a checklist and ticking boxes. This is where a lot of applications fall down or end up failing the common sense test. It is not fair on the client at all. Barclays in particular ignore debts that are being repaid on completion, so this is even more frustrating when you get conflicting information.
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David Stirling
Independent Financial Adviser at Mint Wealth
Barclays have become particularly difficult to deal with in recent years, with no joined-up thinking from their underwriters and back office. Underwriters should be given more flexibility to assess the impact of consolidating, or not consolidating, unsecured debts. In this instance the savings were significant and a no-brainer with a bird's eye view of the situation.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
The FCA's own Consumer Duty research reveals widespread inconsistencies in affordability assessments. Loyal banking customers seeking to consolidate existing debts, a move that demonstrably improves financial health according to the Financial Services Consumer Panel, find themselves trapped in a Kafka-esque paradox. They are deemed unable to afford the very debts they're currently servicing at higher rates. The Money and Mental Health Policy Institute has extensively documented how such practices intensify customer anxiety, creating a perfect storm where lenders effectively tell customers, "We trust you with unsecured lending at premium rates, but won't securitize that same debt". This curious dance of declining consolidation while continuing to profit from higher-interest unsecured products makes one wonder if affordability metrics are designed to protect consumers or simply to throttle choice and allow the banks to continue fleecing the customers at higher interest rates.