The team at Perenna has issued a statement indicating their restrictions have been lifted by the Prudential Regulation Authority and Financial Conduct Authority. This means they can now offer fixed-rate mortgages in the UK.
Unlike the US and other European countries, the UK market is “dominated by variable and short-term fixed rate products.” This means mortgage holders can be exposed to greater interest rate risk as the loans re-price in a high-rate environment.
In the UK, borrowers are forced to “speculate on their biggest debt due to the limited choice of products, which is not the case in other countries.”
The firm’s proposition is “created by a funding model which relies on issuing covered bonds to investors seeking long-term stable income, such as pension funds and insurance companies.”
This allows them to “develop a range of innovative products aimed at addressing structural problems in the mortgage market for first time buyers, second steppers and later life homeowners.”
Arjan Verbeek, CEO & Co-Founder, Perenna, said:
‘’We’re introducing much needed structural change to the UK. In other countries, billions of pounds of pension savings are channelled into the real economy using covered bonds. Together, our unique funding model and banking licence will enable us to do exactly the same in the UK and unlock the housing market, an important part of GDP.”
Colin Bell, COO & Co-Founder, Perenna added:
“Our mission is to create a nation of happy homeowners. We’re excited to offer our flexible products to consumers who, for too long, have been left underserved. Our product offers improved affordability, certainty of monthly payments, and flexibility through low ERCs. We want people to get on with their life and not worry about their mortgage product.”
The first step in their journey is to offer mortgages to eligible borrowers currently on their mailing list.
The team says they look forward to improving the UK mortgage market.