"Criteria has been improving for self-employed borrowers previously, but in October, lenders’ focus was on those looking to get onto the property ladder."
Clearly impressed with brokers’ superhero costumes, lenders were handing out and assortment of positive criteria changes. These treats were particularly appetising for first-time buyers, those with impaired financial histories, and also landlords with energy efficient properties.
Let’s dive in to the changes.
Week 1 – WC 4th October
The month started with news from Interbay Commercial, which relaunched its buy-to-let range with a number of enhancements. All early repayment charges now apply for the initial fixed rate period only, removing the 1% ERC overhang.
There were also interesting changes for older borrowers, with Pure Retirement launching a range of lifetime mortgages that offer higher LTVs with more flexibility to borrowers wishing to make over-payments.
Knowledge Bank’s recent criteria tracker results have shown brokers are working with a significant number of borrowers that have imperfect financial records, and Buckinghamshire Building Society launched new products to support these clients.
The Building Society’s new ‘Solution Portfolio’ is aimed at supporting adverse and impaired credit applicants, and uses a credit matrix structure which allows the lender to offer a range of rates and LTVs, based on the borrowers’ individual circumstances.
Week 2 – WC 11th October
The trend of staycations doesn’t look to be going anywhere soon, and lenders are launching products to support landlords looking into holiday lets. One of these was LendInvest, which introduced a holiday let range, with rates starting at 3.59% for two-year fixed rates up to 65% LTV.
Lenders also adjusted criteria around bonus payments used for affordability, with Pepper Money and Mansfield Building Society both announcing they will consider 50% of regular bonus and commission payments in affordability calculations.
With a raft of new starters in September and October as the furlough scheme wound down, Coventry for Intermediaries announced it was allowing first-time buyers to apply for a mortgage before they’ve finished their probation period.
There was more encouraging news for first-time buyers with Coventry for Intermediaries also launching a new range of mortgages with 95% LTV to help borrowers get onto the ladder.
Ahead of the COP26 summit, Foundation Home Loans launched a range of ‘Green ABC+’ fixed-rate products. These include both buy-to-let and owner-occupied mortgages, with rates and cashback based on the property’s energy performance rating.
Week 3 – WC 18th October
In the third week of October, Clydesdale Bank increased LTV for both residential and buy-to-let products. The residential range now has a maximum LTV of 95%, and for rental properties the maximum LTV has increased in 80%.
Cambridge Building Society reintroduced its buy-to-let top slicing proposition. Loans of between £20,000 and £750,000 are available to landlords, with top slicing permitted on up to three mortgaged rental properties at up to 75% loan-to-value.
In further buy-to-let news, LendInvest launched an ‘EPiC’ product range, offering reduced rates and fees for environmentally friendly properties. The EPiC range affects each area of the LendInvest buy-to-let suite, offering reduced rates for standard properties, houses in multiple occupation, multi-unit freehold blocks and holiday lets.
As the mortgage market continues to march towards normality, Aldermore announced it has returned its capital raising limits back to pre-Covid levels. The lender also declared it has increased its minimum income requirement to £60,000 for borrowers to be able to access its 5.5 times loan to income ratio.
There were further criteria changes for those who have struggled financially in the past, with Pepper Money issuing a new range of mortgages aimed at potential borrowers who have been discharged from bankruptcy or an individual voluntary arrangement.
Week 4 – WC 25th October
In the last week of the month, Virgin Money announced it would accept 60% of an applicants’ bonus for affordability calculations. Additionally, the lender said where variable pay exceeds basic income, they will use a two-year average to calculate affordability.
Paragon Bank announced a raft of changes to its maximum loan sizes for both portfolio and non-portfolio landlords. The maximum increased to £4m for portfolio landlords, and £1m for non-portfolio.
There was also more good news for first-time buyers, as Skipton Building Society increased its LTV to 95% for joint borrower sole proprietor, three or four person applications, and family purchase and tenant purchase situations.
Loughborough Building Society also made positive changes that will help those with smaller deposits, increasing maximum LTV on its joint borrower sole proprietor offering from 85% to 90%.
Overall, October certainly was more treat, than trick. It was a very a positive month for first-time buyers. Criteria has been improving for self-employed borrowers previously, but in October, lenders’ focus was on those looking to get onto the property ladder.
