UK start-up Perenna secures unrestricted banking licence from FCA and PRA
Mortgage bank Perenna has landed an unrestricted banking licence from the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), giving it the green light to introduce its long-term fixed rate mortgage products in the UK.
Perenna receives UK unrestricted banking licence
The bank’s offering seeks to provide an alternative to variable and short-term fixed rate products that it claims are perpetuating households’ exposure to rising interest rates.
According to the Bank of England’s Financial Stability Report, published in July 2023, over one million mortgage payers in the UK will experience an increase of £500 or more in their repayment costs by the end of 2026.
Perenna’s new licence will enable more market diversification, with the firm set to offer mortgages with fixed rates of up to 30 years. The bank also plans to offer an early repayment charge (ERC) period of five years, funded through the issuance of covered bonds.
Arjan Verbeek, CEO and co-founder of Perenna, anticipates that the launch will introduce “much needed structural change” to the UK’s mortgage market.
Co-founder and COO Colin Bell says the bank’s product offers “improved affordability, certainty of monthly payments, and flexibility through low ERCs”.
“Our mission is to create a nation of happy homeowners. We want people to get on with their life and not worry about their mortgage product,” Bell adds.
Perenna is expected to go live in the UK later this year.
