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"In a brave move, Santander has loosened affordability criteria in line with the FCA’s wishes"

ended 28. March 2025

Santander, it was revealed overnight, has become the first lender to loosen affordability rules, enabling people to borrow up to £35,000 more (subject to income). The move follows the government asking regulators to create an environment that fosters growth and guidance from the FCA to banks earlier this month where it set out steps to support home ownership. Newspage asked brokers if this is the reintroduction of sensible levels of risk back into the UK mortgage market or an ominous first step back towards the Wild West lending that was prevalent pre-Global Financial Crisis? Their views are below.

10 responses from the Newspage community

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Bob Singh
Founder at Chess Mortgages
In a brave move, Santander has loosened affordability criteria in line with the FCA’s wishes. Buyers previously struggling to achieve a certain borrowing level may now get the house of their dreams. With a base rate cut now not expected until the summer, this move will be welcomed by many to ensure the market maintains momentum after the stamp duty rush is over next week. The ability to borrow more could plug the gap and be the tonic the market needs until we see further rate cuts. Other lenders will surely follow suit.
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Riz Malik
Independent Financial Adviser at R3 Wealth
This will provide a major boost for those looking to buy while we wait for further rate cuts from the hesitant Bank of England. While a lull in the market was expected following the stamp duty rush, Santander could have just reignited it. Santander could now be flooded with applications given their first mover advantage. Considering there were talks of Santander leaving the UK, they have firmly planted their flag. Others will surely follow.
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Chris Barry
Director at Thomas Legal
This seems like a sensible move by Santander and I’m sure the other high street banks will follow their example. There will be some nervousness from those who remember 2008, however the banks now have much stricter regulations around debt to deposit ratios to prevent banks getting into real trouble.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
This will no doubt offer a real boost to borrowers but we have to be careful that we do not revert to the Wild West that was the mortgage world in the years leading up to the Global Financial Crisis. More flexibility is welcome but it should not come at the cost of putting borrowers at risk.
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Craig Fish
Director at Lodestone Mortgages
This is a sensible move by Santander, as lenders have been far too cautious in recent times. The expectation is that rates are on a downward trajectory so it seems excessive to be stress testing at rates which are unlikely to be seen anytime soon, unless something catastrophic happens. I expect other lenders to follow suit, but I don't expect this to result in a flood of applications to the market.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
This move by Santander could provide real momentum to the property market, especially if other lenders follow their example as you imagine they will. Though some will fear this could be an ominous step back towards the kind of lending that existed before 2008 and the Global Financial Crisis, I don’t think this is the case. Lenders have long memories and will be very wary of those dark days.
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Adam Stiles
Managing Director at Helix Financial Partners
With rents at an all-time high, the cost of living and high taxes making it incredibly difficult to save any money for a deposit and the average mortgage affordability and income multiple needed to borrow anything meaningful to get onto the housing ladder, Santander's move will allow more people to buy homes. With rates dropping from their peak and likely one or more predicted base rate reductions this year, an easing of the stress test makes sense. If the base rate creeps back up again then this will obviously need to be kept an eye on to make sure people aren't being put into financial distress. We expect other lenders to follow suit.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
This increased lending potential for borrowers is greatly welcomed and reduces the height of one of the major hurdles to homeownership. Given we had a spike in interest rates, and even at the peak these were well inside the current stress-test rates, this doesn’t seem high risk and should see other lenders follow with policy changes of their own.
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Jack Tutton
Director at SJ Mortgages
Whilst this is a bold and progressive move from Santander, aspiring home buyers are much more budget-focused than to borrow as much as they can. This remains a big shift in buyers thinking since the infamous mini-Budget and the hike in interest rates that still remain today.
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Iain Swatton
Director at Exemplar Financial Services
Santander’s move to loosen affordability rules is welcome news for borrowers, offering a much-needed boost to affordability in a market where rising house prices and stubborn interest rates have made it increasingly difficult to get on the ladder or move up it. This isn’t a return to reckless lending, far from it. Lenders like Santander will be closely monitoring borrower conduct to ensure sustainability. If anything, this is a sensible step towards recalibrating the market. There will always be those who err on the side of caution, but measured risk is necessary to drive growth and accessibility. Hopefully, other lenders will follow Santander’s lead, making it easier for more people to achieve their homeownership goals.