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HSBC increases maximum lending limits: "UK mortgage market seems to be getting ready for a frenzy of activity"

Journalist: Riz Malik

ended 10. July 2024

In an enhancement that will help more people achieve their homeownership goals, particularly in higher cost areas, HSBC UK is increasing the maximum amount that can be borrowed on hundreds of mortgages. The changes, which come into effect today, increase the amount of borrowing available on residential home purchases and remortgages. The bank is also simplifying its mortgage range by streamlining its LTV tiers, removing the 65% LTV and 80% LTV tiers, making it possible for customers to access higher lending amounts at a higher LTV. The new maximum lending limits will initially be available to applications through mortgage brokers.

The uplift on lending capital repayment mortgages include:
 
·          95% LTV mortgages increasing from £500,000 to £570,000
·          90% LTV mortgages increasing from £550k to £750,000
·          85% LTV mortgages increasing from £750,000 to £2m (increased to £1m for flats)
·          75% LTV mortgages increasing from £2m to £3m
·          70% LTV mortgages increased to lending over £3m

Accord has also announced that it is reducing a number of its fixed-rate products.

Newspage asked brokers whether this development spells a new era for the UK mortgage market, and whether the second half of the year could see demand for property increase. Their views are below. 

10 responses from the Newspage community

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Riz Malik
Independent Financial Adviser at R3 Wealth
HSBC has got the memo that competing on criteria is as good as competing solely on rate. The UK mortgage market seems to be getting ready for a frenzy of activity in the second half of the year. If the Bank of England give us good news on the 1st of August, the rest of 2024 could be stellar.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
These criteria changes should not be underestimated and will give homeowners around the country a real boost. Rate cuts often dominate the headlines but today it’s the turn of criteria. Hats off HSBC.
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Darryl Dhoffer
Founder at The Mortgage Geezer
These rate reductions by Accord and increases to minimum loan amounts by HSBC show that that the mood music has changed in lenders. But is that the case with borrowers? Perhaps not so. Only time will tell, but I'm certainly not seeing the phone ringing off the hook with calls from potential borrowers. Until inflation is consistely on or below the 2% target, over multiple months, the Bank Of England may not reduce base rates. That's what I expect to trigger a return by borrowers to the market but it's a fine balance currently.
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Michelle Lawson
Director at Lawson Financial
Lenders making criteria amendments like this is great news for borrowers. Criteria tweaks are often overlooked but can have just as powerful an effect on the mortgage and property markets as rate cuts. Chapeau HSBC.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
HSBC are showing an increased appetite to lend, particularly in the larger loans space. Reducing rates to win business will only grow the loan book so much, with others following suit so quickly. These criteria changes open up their competitive rates to more clients, which is a win-win for HSBC and borrowers across the UK.
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Andrew Montlake
Managing Director at Coreco
This is a welcome move from a big lender, which shows not only that there is a larger appetite to lend, but also belief in the strength and stability of the housing market. Moves like this will enable more borrowers to obtain the finance they need to purchase their dream home and it is a sign that we are entering into a more competitive lending market once more.
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Craig Fish
Director at Lodestone Mortgages
One of the UK's largest lender continues to put consumers first, and these fantastic enhancements mean that more people can now buy. This is a very clear signal that the economic outlook is improving and is only set to get better. The stars are aligning for a fantastic second half of 2024. All we need now is for the Bank of England to read the memo.
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Rohit Kohli
Director at The Mortgage Stop
HSBC signals their confidence in the direction of travel with these changes to their criteria. This is just as big news as interest rate reductions and often gets missed by borrowers when considering their mortgage options. Coupled with Coventry and Accord reducing rates today, this is another milestone week for would-be borrowers and buyers alike.
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Simon Bridgland
Director at Charwin Private Clients
The market is rampant with change. It is shaping up to be a very busy second half to the year. The seemingly small change for HSBC will send echoes around the market about its belief in the sector, as will the rate drops we are seeing hourly at the moment. Accord have also joined the front runners today, having announced more positive rate cut news as well as a fee reduction.
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Dariusz Karpowicz
Director at Albion Financial Advice
More good news from lenders. With rate decreases and now HSBC increasing lending limits, it’s looking brighter for property buyers, especially those with lower deposits. This will make a big difference in higher-cost areas. Simplifying the LTV tiers also means more people can access higher lending amounts. All in all, very positive news. Let's hope these kinds of updates keep coming and give the market the boost it needs for a busy second half of the year.