"What we have done is take on board feedback that certain requirements and documentation were hindering zero hours contractors’ chances of getting onto the property ladder"
HSBC UK has announced a number of improvements to its criteria to help workers on 'zero hour' contracts to gain access to its mortgages.
The changes will relax certain conditions for evidential documents and make earnings calculations more accurate.
Improvements include reducing the amount of continuous employment required with the same employer from two years to one year, plus replacing the requirement to produce two years’ P60 statements with the latest P60. In order to have greater visibility of current earnings and produce a more accurate affordability assessment, the last three payslips will be required instead of one.
HSBC has also refreshed interest rates on its mortgage range, with rate cuts of up to 0.35%.
A five-year fixed rate at 95% LTV has been reduced by 0.35% to 3.14% and a three-year fix at 95% LTV has been cut by 0.30% to 2.99%, both with no fee.
A two-year fixed rate at 95% LTV with a £999 fee has been reduced by 0.15% to 2.69% and a five-year fixed rate at 60% LTV is 10bps lower at 1.59%.
Aaron Shinwell, head of mortgages and savings at HSBC UK, said: “A lot has been said about ‘zero hours’ contracts over the last few years, much of it giving the impression they are inherently bad. The reality is that a significant number of people - approaching two million contractors working an average of 25 hours a week - are on zero hours contracts, and rely on them for their income. The flexibility suits their lives and their lifestyle, and their needs shouldn’t be ignored.
“What we have done is take on board feedback that certain requirements and documentation were hindering zero hours contractors’ chances of getting onto the property ladder, or remortgaging, with us, and as such our attractive mortgages were not realy an option. These improvements will benefit all agency workers.”