Perenna secures bank licence to shake up the mortgage market

A new bank is launching in the UK to disrupt the current mortgage market.

Perenna, co-founded by Colin Bell, Arjan Verbeek and Hamish Peacocke in 2018, has secured its unrestricted banking licence from the Prudential Regulation Authority and Financial Conduct Authority.

The new British lender is launching mortgages with fixed rates for 20 to 30 years, while allowing users an early repayment charge period of five years for flexibility.

“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,” Perenna CEO Verbeek said.

“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.”

Perenna says its funding model relies on issuing covered bonds to investors seeking long-term stable income, including pension funds and insurance companies. 

The bank first received a restricted licence from the FCA last August, and over the last few years has raised £35m, including a £25m Series A round from Zopa-backer Silverstripe IAG.

“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,” Perenna chief operating officer Bell said.

“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.”

Perenna is offering its mortgages to people on the waitlist first before opening the product up to the wider public later in the year.