Mortgage lending

Lenders are relaxing their lending rules

Lenders are facing stiffer competition for borrowers.

Mortgage lenders are beginning to relax the ‘affordability’ criteria making it easier to lend and bring more borrows into the market.

This also means that borrows can now apply for larger loans where previously the affordability criteria would have prevented them from doing so.

Mortgage providers are reportedly missing their lending targets and house purchase transaction levels are falling.

The combination could spell ‘good news’ for those who have struggled to get a foot hold on the property ladder.

As mortgage brokers Buckingham James are seeing a number of prime lenders increasing loan to income multiples and these include Barclays, Platform and Cambridge Building Society.

Another lender – Coventry for Intermediaries have recently announced that it will take fewer items considered as essential living costs into account and will now include child benefit as part of the household income.

They have also altered their affordability rules to help those earning between 25,000 and 70,000 per year borrow higher levels aiming to make a real difference to this segment of the market.

Other lenders such as Natwest, and Santander, are said to be taking a more generous view on optional deductions on payslips. This is something other lenders may decide to follow, as many employed borrowers do have a choice on whether they take optional extras offered by their employers.

This in whole is good news and is seen as a way of preventing a property crash but equally doesn’t signal a move back to the days of irresponsible lending.

As always, Buckingham James will provide you with the appropriate level of advice helping to meet your requirements with your circumstances.

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