Spotlight on UK Finance

UK Finance has been involved with the Consumer Code for Home Builders since its inception in 2010. Having contributed to the original requirements that help ensure consumers receive strong protection and redress, UK Finance has continued to support the Code’s development through our Advisory Forum. It also provides an important role in setting standards and best practice for lenders and has just published new guidance to help home warranty schemes understand what lenders typically require from home warranty cover.

We caught up with UK Finance Principal and Advisory Forum member, John Baguley, to understand more about how UK Finance supports the home buying process.

Can you tell us about UK Finance?

UK Finance is a membership body representing approximately 300 organisations providing banking, finance, markets and payments-related services. These services are used by customers to access a wide range of financial and advisory products and services, essential to their day-to-day activities. UK Finance provides policies, guidance and expertise to help members provide safe, compliant and trustworthy services that consumers and businesses can rely on.

What role does UK Finance play in the new build home market?

Our members are actively involved in providing mortgage finance to facilitate homebuyers purchasing their new build property, whether that is as a first-time buyer or a buyer moving to a larger or smaller property. Our role is to keep up to date with all the latest news, regulations and best practice to help our members to continue to lend, to enable the general public to buy their property of choice.

What are the main challenges facing mortgage providers and their customers?

Affordability can be a challenge, certainly in parts of the UK where income levels differ. But the housing market remains extremely resilient having weathered recent events such as Covid and the cost-of-living crisis. Increased supply is a key pledge from Government, and we would support a continued mix of tenure types to help as many people as possible get onto the housing ladder.

Why have you published guidance about home warranty cover?

The builder selects the warranty cover and not the buyer. Our members have a duty to lend responsibly, and to facilitate better transparency and consistency in the warranty market was one of the drivers to develop the guidance. The home buyer should have the assurance that the warranty cover is consistent regardless of which builder they buy from. Although we are not in a position to set mandatory standards, meeting the expectations set out in our guidance will help ensure essential elements are in place.

How important are codes of practice in the new build home sector and why does that matter to lenders?

UK Finance supports codes of practice across several markets, to ensure minimum standards exist and more importantly that effective redress is available should something go wrong. The work of a code provider is vital in delivering this as it is driving standards forward.

What improvements would you like to see in the new build market that would support consumers?

Standards around build quality remains in the spotlight, both in the traditional new build market but also flats in the aftermath of the Grenfell tragedy. We would want to see standards and codes of practice continue to evolve, to ensure buyers move into their property of choice without avoidable build issues.

To find out more about UK Finance, visit the UK Finance website or download the new home warranty guidance issued as part of the Mortgage Lenders Handbook.