Interview: April Mortgages

“A good adviser is the person that papers over the cracks. I’ve got massive respect for what the adviser market has done over the past 15 years.” 

In every market cycle, particularly now that artificial intelligence (AI) has fully entered the chat, there is an inevitable conversation about adviser obsolescence. Today, borrowers are more informed than ever, with access to information at their fingertips, financial ‘influencers’ giving them seemingly free insights of varying quality, and even chatbots that can provide a simulacrum of advice to help them interpret a complex market.  

Nevertheless, Pagan says, “while the internet gives customers information, advisers give customers confidence.” In fact, the wealth of resources out there seems only to be helping borrowers realise how complex the options are, and understand the need for a trusted resource.  

Modern solutions 

Good advice can only go so far, though. For first-time buyers to make it onto the property ladder, the products themselves must be fit for purpose.  

This is where April Mortgages’ philosophy comes into play.  

Pagan explains: “We came to the UK with a purpose really to bring more stability to the lives of first-time buyers and all mortgage holders.  

“Our product is different, which in theory could increase complexity, but it’s literally designed around what are the things that will help the longer-term fixed rate work in the UK. 

“For example, if the first-time buyer starts at a high LTV, the rate will naturally reduce with its LTV.” 

In addition to easing affordability challenges, April Mortgages takes into account that life events, and unexpected disruptions, can take place at any time.  

“If they need to sell up because something goes wrong, there is no early repayment charge,” Pagan says. “If their income increases and they’re ready for the next house in two years’ time, again, they can get out of the April product with no penalty. 

“My job, effectively, is to tailor that pretty unique product to the needs of the different segments of the market. Affordability was one of our first big areas we went into – how could we unlock extra affordability for people, using the power of the longer term fixed rate? 

“For 100% LTV, we’ve used only our 10-year product to start with, to learn about the market. That extra stability has given us the confidence to have the simplest 100% product in the market.” 

Brown adds that there is a lot of focus in the market on headline rate, but that this should shift from being a key priority to simply one factor. The broker’s role is to help the borrower find a product where the rate is workable, but more importantly, the structure of the loan works for their circumstances, both now and in the future.  

For example, April deliberately positions itself around long-term value rather than pushing for the cheapest price.  

Brown adds: “We’re looking for partners who are actual advisers. What I mean by that is people who actually will embrace that there is a selection of options. We’re not saying everyone needs to come to April, but there will be clients out there who value that peace of mind, and for whom the rate itself is not the biggest reason to use us. 

“If you look at the volatility in terms of price movements, who’s to say that within the next five years, things will remain the same. 

“When we educate brokers about our proposition as a whole, and our objective of peace of mind, security, while having flexibility in our products, advisers get it.” 

April aims to be another helpful tool in the adviser’s toolkit, perfect for the right clients, rather than replacing every other lender.  

Self-service and automation 

Many of the larger, more high street lenders are becoming increasingly automated, while the conversation around self-service models of lending has once again emerged in recent months. Brokers should not be concerned, however, as for every client that is able to make self-service work for them, many more will continue to need help navigating a complex market.  

Brown says: “When you  truly look deep, deep down at the complexity of most individuals, they will understand that the value of advice is so important. 

“A lot of people will first go and check, say, an aggregator, or speak to their bank. Often they find actually, for one reason or another, they need a more comprehensive solution. The right advice will always play a huge part in the market, and will continue to do so as the complexities of people’s lives continue.” 

Pagan adds: “The beauty of the UK market is that there is a really rich set of second, third and fourth-tier lenders that embrace that customer complexity. I don’t see that changing, and therefore there is a strong place for advisers if they’re willing to keep their mind open to a full range of options, because there are some really, really great options out there in the market.” 

While many large lenders might be accused of attempting to make the journey to homeownership as homogenous as possible, other lenders must take up the slack of innovation. 

Nevertheless, while April Mortgages makes it a mission to keep the market moving and modernising, Pagan and Brown are very clear on the fact that innovation should not exist for its own sake, but must focus on solving real problems. 

Pagan says: “I see lots of good innovation in the market, and I see a willingness from the [Financial Conduct Authority (FCA)] as well to support the market in a way that I don’t remember seeing for a long time. There’s a lot to be cheerful about in the UK market. 

“We’ve certainly felt embraced as an innovative new lender by both brokers and some of the other lenders, actually. We’re doing something  unique and special, but we’re not alone in doing that. There are a growing range of good options for borrowers and the environment is right for further innovation. We hope to be a leading part of that, obviously.” 

“We particularly champion the idea that innovation only matters if it solves a real customer problem,” Brown adds. 

To this end, April Mortgages engages with an ongoing discourse with brokers, to find out what real customers are struggling with, as well as what is and is not working with existing criteria. This is supplemented by work to monitor actual product performance, using CRM data and tracking enquiries in order to evolve existing products based on actual customer need, as well as exploring where there are areas of unmet demand.  

Product development at April Mortgages is both personal and analytical. Every broker call is logged, their enquiry reasons are tracked, and internal data is benchmarked against industry statistics. Often, it is the cases that do not get placed that are most valuable for future development.  

Brown explains: “One of the biggest things that we do is remain open to listen to our intermediary partners. Myself and my team – through every single interaction with brokers, we ask them about our existing policies. Does it work? How’s it going? What else can we do to support you? What are your clients missing out on? How can we ensure that we are always evolving? 

“Then, we work really closely internally with James’ team and with underwriting, and we’ll feed that back, while James will also have insight from other colleagues.” 

This means that, under the “great headline” of a 100% LTV mortgages, there are nuanced criteria with real-world relevance. This is also part of the lender’s approach to ensuring that it is responsible in its lending, which is a topic of much debate when it comes to 100% mortgages. 

Common sense and service 

Flexibility and peace of mind do not end with the products. Pagan highlights that April Mortgages, in addition to constantly working to evolve its proposition, is also willing to work on cases that sit just outside its existing criteria, aiming to build on its reputation for common-sense underwriting.  

This does not just apply to the moment the loan is completed, but the full customer life-cycle, including working to support customers through changing circumstances.  

When asked how the lender balances this flexibility with taking a responsible approach to managing its book, Pagan says: “It’s rarely responsible to not support a borrower. 

“Generally, if the outcome is bad for the end customer, then it’s going to be bad for you too, and you’re most likely to end up with a repossession loss. We’ve hardly had any arrears so far, so it’s a journey that may play out over time, but I have a lot of experience in managing customer bases, and our head of servicing has been an expert for a very long time. 

“Our philosophy is very matched to our parent company’s: we will treat each individual circumstance sympathetically and personalise a solution to that customer’s needs. 

“We’re already helping some relatively tricky customer situations with quite a lot of success.” 

Brown adds that the product criteria the lender has developed also helps provide certainty from the first day of the loan, adding: “For us, buying a home is important, but helping customers stay in their home is essential.” 

Common sense support does not just apply to the end user, but to intermediaries too. April Mortgages works to provide fast responses, early engagement, and importantly, direct access to underwriters and decision-makers. It also facilitates the work being done by brokers with education and workshops. 

“At a principal level, we’re a broker-only lender,” Pagan explains. “We view it as that we support brokers’ clients. We will not try and steal the client at the point of the product expiring, and if a broker sells a long-term fixed rate, there’s actually a second proc fee after five years, and a third if they sell a 15-year rate.  

“We want to reward the broker for managing that long-term relationship for us. If there are any ongoing advice needs during the life of the loan, we don’t try to manage that internally, we will send them back to their original broker.  

“One of our founders was a broker. We were built by brokers, for brokers.”  

April Mortgages soft-launched in the UK in 2024, and while it has taken a clear place in the market in a short time, Pagan says its success has been due to a concerted effort not to rush in.  

“We actually started with only 300 brokers, and we very much tested and learned as we went,” Pagan explains. “Then, our voice got louder as we started rolling out, and we’re currently up to about 60% of the market in terms of distribution. 

“We probably punch above our weight from a brand point of view now, but it’s been based on learning within the market and slowly building those relationships over time. 

“Then, as we’ve innovated more on products and in terms of sales and marketing, and have been genuinely honest and authentic about our beliefs in the market, that has caught people’s attention. It has been more of an evolution than a revolution.” 

Winds of change 

April arrived in the UK mortgage market during a period of transformation, which it has both shaped and been shaped by. Overall, innovation is increasing in response to strong headwinds and growing complexity, both among borrowers themselves and the market they find themselves in. 

Through all of this, April Mortgages sees its role as going beyond providing innovative products.  

“We really believe in that long-term peace of mind for clients, and it’s important that we articulate that through industry events,” Brown explains. “It’s important to not only have a voice among, say, the bigger players, but also to then build that belief inwards in terms of our own colleagues.  

“Let’s continue to push innovation, let’s push each other, and let’s continue to look at ways to support ever-changing client relationships.  

“Beyond just product innovation, that’s why it’s incredibly important that we are plugged in to the community, to the market, and also that we learn ourselves from attending events and speaking to brokers, to other lenders, to customers. 

“At the end of the day, our customers are the brokers, and their customers are the customers, and we need to learn from both.” 

Having lenders firing on all cylinders is only part of the picture, however. Product innovation alone will not fix structural issues in the housing market.  

Pagan says: “We can’t shy away from the supply barriers in the UK, finding the right home at the right price. The cost for builders to build those homes has skyrocketed as well. So, there are some really big fundamentals on that side, and it’ll be interesting to see, if the Government changes, what actually happens to support the supply side. 

“From a demand perspective, we are getting more first-time buyers, but the market can still do more, particularly for those that aren’t lucky enough to benefit from the ‘Bank of Mum and Dad’.” 

Creating a healthy flow of first-time buyers does not exist in isolation, of course. For people to have first homes to move into, second-steppers, movers and even later life downsizers all need to feel the effects.  

“There has been good success for first-time buyers, but there are there are many other parts of the market where further innovation and support is needed,” Pagan explains. 

To this end, April does not focus its support solely on the first rung of the ladder, and its flexible products also aim to help second-steppers find certainty in their move, buy their dream home, or start back out after a setback in their ownership journey. 

“While first-time buyers is a particular strength of April’s, we support second steppers really actively,” Pagan continues. “Then, in terms of those older borrowers, it’s another proposition we’re working quite hard on.  

“We’ve got a very competitive proposition already on the repayment mortgage and we’re thinking about how we can support other segments, too.” 

Amid the trends facing first-time buyers – as well as talk of evolving advice patterns, digitisation of the homebuying journey, and innovation – is the looming problem of supply. 

Pagan says: “How far products need to go will depend on whether the supply side gets sorted out.  

“There is a scenario where house prices stay relatively stable, the house building targets really start flowing through, and there could be a very rich future for even more first-time buyers. 

“Unfortunately, there is also a scary scenario where the market stagnates and the uncertainty that many younger people face now really just keeps holding them back.” 

While the future is uncertain, the mood at April Mortgages is optimistic, and it is clear that positive change cannot happen without the right lenders doing what they can to affect it. 

Brown says: “It’s for us to continue to amplify and communicate to first-time buyers. Education is key. There’s a lot of misinformation that’s out there in the market, whether from influencers or other forms of technology presenting things as fact. 

“We want to be one of the lenders out there that continue to educate. 

“It’s not the responsibility of just one area of the market, so we as lenders need to ensure we educate, as well as the networks and the clubs, to support brokers in how they manage client expectations. 

“The more we support the broker and the client, the more the client will understand the value of advice.”  

Beyond this, Brown and Pagan call for Government and the industry to address the barriers created by bureaucracy, for the digitisation and simplification of the house buying process, and a decrease in contractual uncertainty.  

For April Mortgages, in the meantime, the focus is on building out its 100% LTV proposition, further product innovation, and continuing to lean into certainty, flexibility and responsible lending.  

The future challenge for lenders is not simply helping people buy their first home. It is designing products, partnerships and support that reflect the increasingly unpredictable lives first-time buyers now lead, giving advisers more tools to guide customers not only onto the property ladder, but also to help them remain there.