Chancellor vowed to be ruthless but large number of brokers view changes as mere 'tinkering'
Only 23% of mortgage brokers support Chancellor Rachel Reeves’ plan to roll back mortgage lending restrictions introduced after the 2008 financial crisis, according to research released by buy-to-let lender Landbay.
The survey, conducted in July, sought broker views on proposed reforms to responsible lending rules, which Reeves outlined in her Mansion House speech. The chancellor said the government aims to ease regulatory constraints to support home ownership, increase lending accessibility, and shift regulatory priorities toward economic growth.
As part of the Labour government’s wider economic strategy, Reeves stated her intention to “tear up reams of financial red tape” and to be “ruthless in slashing rules that make the UK uncompetitive”. She also said the current regulatory focus on risk had come at the cost of growth.
However, the Landbay findings suggest limited support among intermediaries. Only 16% said the reforms would benefit first-time buyers, while just 7% believed they would spur economic growth. Meanwhile, 30% warned the proposals could lead to riskier loans, and 47% dismissed the changes as superficial, calling them “tinkering” with existing rules.
“The chancellor says she plans to tear up ‘reams of financial red tape’ and be ‘ruthless in slashing rules that make the UK uncompetitive’. But brokers aren’t quite so sure that looser mortgage lending rules will deliver that,” said Rob Stanton, Landbay’s sales and distribution director.
Stanton noted that only a quarter of brokers surveyed backed the reforms, with nearly half downplaying their potential impact. “At Landbay, we understand the need for growth, but striking the right balance between access to lending and managing risk is critical to avoid repeating past mistakes,” he said.
Reeves’ proposals are part of the Treasury’s push for regulators to adopt measures aimed at stimulating growth, following economic stagnation in the latter half of 2024. The government is opening a wider discussion on the trade-off between access to lending and potential default levels.
UK mortgage lending is governed by regulations from the Financial Conduct Authority and the Bank of England, many of which were introduced after the 2008 financial crash. These include affordability stress tests and limits on loan-to-income and loan-to-value ratios.
Landbay said it would continue to focus on innovation and competitive offerings for brokers and landlords, regardless of the broader regulatory changes. Stanton added that the firm aims to maintain market stability through product development and support for refinancing landlords.
